Exhibit 10.1
EXECUTION COPY
AMENDED & RESTATED MANAGEMENT AGREEMENT
by and between
CRONOS CONTAINERS (CAYMAN) LTD.
and
CF LEASING LTD.
Dated as of June 15, 2004
ALL RIGHT, TITLE AND INTEREST IN AND TO THIS AGREEMENT ON THE PART OF CF LEASING
LTD HAVE BEEN ASSIGNED TO AND ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF
FORTIS BANK (NEDERLAND) N.V., AS AGENT, UNDER A
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Exhibit 10.1
SECURITY AGREEMENT, DATED AS OF SEPTEMBER 18, 2002, FOR THE BENEFIT OF THE
LENDERS AND THE OTHER PERSONS REFERRED TO THEREIN.
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Exhibit 10.1
TABLE OF CONTENTS
Page
----
SECTION
1. DEFINITIONS............................................................... 4
2. APPOINTMENT/AGENCY........................................................ 12
3. DUTIES/RIGHTS OF MANAGER.................................................. 13
4. AUTHORITY/CONSENTS........................................................ 15
5. REMUNERATION.............................................................. 15
6. PAYMENTS TO/FROM BORROWER................................................. 16
7. COVENANTS OF MANAGER...................................................... 17
8. WARRANTY.................................................................. 21
9. INSURANCE................................................................. 21
10. TERM; RESIGNATION BY MANAGER.............................................. 22
11. MANAGER DEFAULT........................................................... 23
12. NON-EXCLUSIVITY........................................................... 27
13. SUB-CONTRACTORS AND AGENTS................................................ 27
14. LIENS..................................................................... 28
15. NO PARTNERSHIP............................................................ 28
16. FORCE MAJEURE............................................................. 28
17. CURRENCY/BUSINESS DAY..................................................... 28
18. INDEMNIFICATION........................................................... 28
19. NO BANKRUPTCY PETITION AGAINST BORROWER................................... 29
20. REPRESENTATIONS AND WARRANTIES............................................ 30
21. GENERAL................................................................... 32
Exhibit A Form of Manager Report
Exhibit B Form of Asset Base Certificate
Exhibit C Copy of Lease Agent Agreement
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Exhibit 10.1
AMENDED AND RESTATED MANAGEMENT AGREEMENT
THIS AMENDED AND RESTATED MANAGEMENT AGREEMENT (as amended, modified and
supplemented from time to time in accordance with the terms hereof, this
"Agreement") is dated as of June 15, 2004 between CF LEASING LTD., a company
with limited liability organized and existing under the laws of Bermuda whose
registered office is located at Xxxxxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxx XX 11,
Bermuda (the "Borrower") and CRONOS CONTAINERS (CAYMAN) LTD., a corporation
organized and existing under the laws of the Cayman Islands whose office is
located at Xxxxxxxxxx Xxxxx, X.X. Xxx 00000 XXX, Xxxxxx Xxxx Grand Cayman,
Cayman Islands ("Cronos" or the "Manager").
RECITALS
WHEREAS, the Borrower is the owner of the Managed Containers (as defined
herein); and
WHEREAS, the Manager is in the business of managing Containers (as defined
herein) on behalf of owners of containers, and is experienced in administration
of companies that own and operate containers;
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
1. DEFINITIONS
Capitalized terms used in this Agreement shall have the following
meanings, and the definitions of such terms shall be equally applicable to the
singular and plural forms of such terms:
"ACQUISITION AGREEMENT" shall have the meaning set forth in Section 3.3
hereof.
"ACQUISITION AGENT" means Cronos.
"ACQUISITION FEE" shall have the meaning set forth in Section 5.2(a)
hereof.
"ADMINISTRATIVE FUNCTION" shall have the meaning set forth in Section 2.1
hereof.
"AFFILIATE" shall have the meaning set forth in Section 101 of the Loan
Agreement.
"AGENT" means the Person fulfilling the role of the Agent under the Loan
Agreement; Fortis will be the initial Agent.
"AGREEMENT TERMINATION DATE" means the date on which the Manager receives
notice that Manager has been terminated as the manager of the Managed Containers
pursuant to the provisions of Section 11.2 hereof.
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Exhibit 10.1
"APPLICABLE LAW" shall have the meaning set forth in Section 101 of the
Loan Agreement.
"ASSET BASE" shall have the meaning set forth in Section 101 of the Loan
Agreement.
"ASSET BASE CERTIFICATE" means an Asset Base Certificate substantially in
the form attached hereto as Exhibit B.
"BACK-UP MANAGER" means Fortis or any of its Affiliates.
"BOARD MAJORITY" means, with respect to an action to be approved by the
Board of Directors of the Borrower, approval of such action by Directors
representing seventy percent (70%) or more of the total number of Directors then
constituting the Board of Directors of the Borrower.
"BORROWER" shall have the meaning set forth in the preamble hereof.
"BORROWER EXPENSES" shall have the meaning set forth in Section 101 of the
Loan Agreement.
"BUSINESS DAY" shall have the meaning set forth in Section 101 of the Loan
Agreement.
"CASUALTY LOSS" shall have the meaning set forth in Section 101 of the
Loan Agreement.
"CASUALTY PROCEEDS" shall have the meaning set forth in Section 101 of the
Loan Agreement.
"CHANGE OF CONTROL" shall have the meaning set forth in Section 101 of the
Loan Agreement.
"COLLATERAL" shall have the meaning set forth in Section 1 of the Security
Agreement.
"COLLECTION PERIOD" shall have the meaning set forth in Section 101 of the
Loan Agreement.
"CONSOLIDATED TANGIBLE NET WORTH" shall have the meaning set forth in
Section 101 of the Loan Agreement.
"CONSOLIDATED TANGIBLE NET WORTH LEVERAGE RATIO" means, for The Cronos
Group, the ratio of (i) Total Liabilities to (ii) Consolidated Tangible Net
Worth.
"CONTAINER" or "CONTAINER" shall have the meaning set forth in Section 101
of the Loan Agreement.
"CONTAINER IDENTIFICATION NUMBER" means the unique reference number
assigned to a Container which is painted on or affixed to such Container.
"CRONOS" shall have the meaning set forth in the preamble hereof.
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Exhibit 10.1
"DEBT SERVICE COVERAGE" means, at the end of each of the four (4)
immediately preceding fiscal quarters, the ratio of (i) the sum of (a) the
consolidated net earnings for the three (3) month period immediately preceding
each such quarter end date and (b) depreciation and amortization for the three
(3) month period immediately preceding each such quarter end date and (c)
non-cash charges (including, but not limited to, deferred taxes) for the three
(3) month period immediately preceding each such quarter end date less (d)
non-cash income for the three (3) month period immediately preceding each such
quarter end date, divided by (ii) the aggregate principal portion of interest
bearing consolidated fund indebtedness of such Person due within the following
twelve (12) months, in each case as determined in accordance with GAAP and as
reported on the most recently available quarterly financial statements of The
Cronos Group.
"DETERMINATION DATE" shall have the meaning set forth in Section 101 of
the Loan Agreement.
"DIRECT OPERATING EXPENSE PAYMENTS" for any measurement period means all
fixed or variable operating costs and expenses to the extent actually paid by
Manager in connection with the use and/or operation of the Managed Containers
during such Collection Period but only to the extent not otherwise payable by
the relevant user of such Managed Container and net of any rebate, discount or
other reduction relating to the relevant cost or expense, including without
limitation all of the following:
(i) expenses of maintaining, repairing, refurbishing, storing,
positioning, transporting and handling of the Managed Containers (in each case
in accordance with the provisions of this Agreement),
(ii) the proportion of the fees and expenses of agents used by
Manager in the ordinary course of its business that relate to the leasing of
Containers (such proportion calculated on a pro-rata basis according to the
proportion that the TEU of the Managed Containers bears to the TEU of the
Containers in the Container Fleet, including the Managed Containers), depot
charges applicable to the Managed Containers (to the extent not charged as a
storage expense referred to in subparagraph 1 above) and insurance premiums (as
provided for pursuant to Section 7 hereof) including premiums paid by, or to
Affiliates of, Manager,
(ii) legal fees and expenses incurred by Manager in connection with
the Managed Containers and the collection of amounts payable by container users
pursuant to Leases relating to the Managed Containers,
(iv) charges, assessments, levies or duties of whatever kind or
nature imposed upon or against the Managed Containers,
(v) ad valorem, gross receipts, property or other taxes levied
against or upon the Managed Containers or the amounts payable in respect of the
leasing thereof,
(vi) the costs of any examination, investigation or other
proceedings conducted by any regulatory body relating to operation of the
Managed Containers, and
(vii) the cost of any capital improvement with respect to a Managed
Container payable by Manager in respect of such measurement period; and
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Exhibit 10.1
Notwithstanding the above, Direct Operating Expense Payments do not include (x)
any Borrower Expenses or (y) marketing, general and administrative expenses of
Manager or its Affiliates, whether or not allocable in part or in whole to the
Managed Containers.
"DIRECT OPERATING EXPENSES" for any measurement period means all fixed or
variable operating costs and expenses to the extent incurred by Manager in
connection with the use and/or operation of the Managed Containers during such
Collection Period but only to the extent not otherwise payable by the relevant
user of such Managed Container and net of any rebate, discount or other
reduction relating to the relevant cost or expense, including without limitation
all of the following:
(i) expenses of maintaining, repairing, refurbishing, storing,
positioning, transporting and handling of the Managed Containers (in each case
in accordance with the provisions of this Agreement),
(ii) the proportion of the fees and expenses of agents used by
Manager in the ordinary course of its business that relate to the leasing of
Containers (such proportion calculated on a pro-rata basis according to the
proportion that the TEU of the Managed Containers bears to the TEU of the
Containers in the Container Fleet, including the Managed Containers), depot
charges applicable to the Managed Containers (to the extent not charged as a
storage expense referred to in subparagraph 1 above) and insurance premiums (as
provided for pursuant to Section 7 hereof) including premiums paid by, or to
Affiliates of, Manager,
(ii) legal fees and expenses incurred by Manager in connection with
the Managed Containers and the collection of amounts payable by container users
pursuant to Leases relating to the Managed Containers,
(iv) charges, assessments, levies or duties of whatever kind or
nature imposed upon or against the Managed Containers,
(v) ad valorem, gross receipts, property or other taxes levied
against or upon the Managed Containers or the amounts payable in respect of the
leasing thereof,
(vi) the costs of any examination, investigation or other
proceedings conducted by any regulatory body relating to operation of the
Managed Containers, and
(vii) the cost of any capital improvement with respect to a Managed
Container payable by Manager in respect of such measurement period; and
Notwithstanding the above, Direct Operating Expenses do not include (x) any
Borrower Expenses or (y) marketing, general and administrative expenses of
Manager or its Affiliates, whether or not allocable in part or in whole to the
Managed Containers.
"DISPOSITION FEES" shall have the meaning set forth in Section 5.3 hereof.
"DOLLARS" or "$" shall have the meaning set forth in Section 101 of the
Loan Agreement.
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Exhibit 10.1
"EARLY AMORTIZATION EVENT" shall have the meaning set forth in Section 101
of the Loan Agreement.
"EBIT RATIO" shall have the meaning set forth in Section 101 of the Loan
Agreement.
"ELIGIBLE INVESTMENTS" shall have the meaning set forth in Section 101 of
the Loan Agreement.
"EVENT OF DEFAULT" shall have the meaning set forth in Section 101 of the
Loan Agreement.
"FLEET" means, as of any date of determination, the entire fleet of
Containers (including the Managed Containers) then owned or managed by the
Manager.
"FORTIS" means Fortis Bank (Nederland) N.V., a Naamloze Vennootschap, its
successors and assigns.
"GAAP" or "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall have the
meaning set forth in Section 101 of the Loan Agreement.
"GOVERNMENTAL AUTHORITY" shall have the meaning set forth in Section 101
of the Loan Agreement.
"GROSS CONTAINER REVENUE RECEIPTS" means for any measurement period:
1. the gross amounts actually received by Manager during such
measurement period from the leasing of the Managed Containers pursuant to
Leases, including, without limitation, amounts in respect of per diem
charges, pick-up and turn-in charges, charges for early termination,
transportation charges, realized exchange differences, pre-trip inspection
charges, direct interchange charges, handling and repair charges, off-hire
service charges, damage protection premiums and other charges relating to
or arising from the Managed Containers, and
2. all other amounts actually received by Manager which are
attributable to the Managed Containers, including but not limited to (i)
amounts received from the manufacturers or sellers of the Managed
Containers for breach of sale warranties relating thereto or in settlement
or satisfaction of any other claims, losses, disputes or proceedings
relating to the Managed Containers, (ii) amounts received from any other
Person in settlement of any claims, losses, disputes or proceedings
relating to the Managed Containers, including insurance proceeds relating
thereto, (iii) amounts representing insurance proceeds for lost lease
revenues and (iv) any insurance premiums relating to the Managed
Containers which have been refunded by the insurer.
Notwithstanding the above, Gross Container Revenue Receipts do not include Sales
Proceeds.
"GROSS CONTAINER REVENUES" means for any measurement period:
E8
Exhibit 10.1
1. the gross amounts actually earned by Manager during such
measurement period from the leasing of the Managed Containers pursuant to
Leases, including, without limitation, amounts in respect of per diem
charges, pick-up and turn-in charges, charges for early termination,
transportation charges, realized exchange differences, pre-trip inspection
charges, direct interchange charges, handling and repair charges, off-hire
service charges, damage protection premiums and other charges relating to
or arising from the Managed Containers, and
2. all other amounts actually earned by Manager which are
attributable to the Managed Containers, including but not limited to (i)
amounts earned from the manufacturers or sellers of the Managed Containers
for breach of sale warranties relating thereto or in settlement or
satisfaction of any other claims, losses, disputes or proceedings relating
to the Managed Containers, (ii) amounts earned from any other Person in
settlement of any claims, losses, disputes or proceedings relating to the
Managed Containers, including insurance proceeds relating thereto, (iii)
amounts representing insurance proceeds for lost lease revenues and (iv)
any insurance premiums relating to the Managed Containers which have been
refunded by the insurer.
Notwithstanding the above, Gross Container Revenues do not include Sales
Proceeds.
"INDEBTEDNESS" shall have the meaning set forth in Section 101 of the Loan
Agreement.
"INSOLVENCY PROCEEDING" means a proceeding under the United States
Bankruptcy Code or the Bermuda Companies Act 1981 or similar applicable law in
any other applicable jurisdiction.
"INTEREST EXPENSE" means for any period, the aggregate amount of interest
expense as shown for such period on the income statement of the Manager or the
Borrower, as applicable.
"INTEREST RATE HEDGE AGREEMENT" shall have the meaning set forth in
Section 101 of the Loan Agreement.
"INTEREST RATE HEDGE PROVIDER" shall have the meaning set forth in Section
101 of the Loan Agreement.
"LEASE" shall have the meaning set forth in Section 101 of the Loan
Agreement.
"LENDER" shall have the meaning set forth in Section 101 of the Loan
Agreement.
"LESSEE" means any Person to whom the Manager (in its capacity as lessor)
leases one or more containers.
"LIEN" shall have the meaning set forth in Section 101 of the Loan
Agreement.
"LIST OF CONTAINERS" shall have the meaning set forth in Section 101 of
the Loan Agreement.
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Exhibit 10.1
"LOAN AGREEMENT" means the Amended and Restated Loan Agreement, dated as
of March 7, 2003, by and among the Borrower, the Agent and the Lenders from time
to time party thereto, as such agreement may be amended, modified or
supplemented from time to time in accordance with its terms.
"MANAGED CONTAINERS" means all of the containers owned by Borrower from
time to time, including, without limitation, any Containers acquired by the
Borrower in accordance with the provisions of Section 3.3 hereof.
"MANAGEMENT FEE" shall have the meaning set forth in Section 5.1 hereof.
"MANAGEMENT FUNCTIONS" shall have the meaning set forth in Section 2.1
hereof.
"MANAGER" shall have the meaning set forth in the preamble hereof.
"MANAGER DEFAULT" shall mean the existence of any of the events or
conditions set forth in Section 11.1 hereof beyond any applicable grace or cure
period set forth therein.
"MANAGER REPORT" means a written completed informational statement by
Manager in the form attached hereto as Exhibit A to be provided by Manager in
accordance with the terms of this Agreement.
"MEMBERS AGREEMENT" shall have the meaning set forth in Section 101 of the
Loan Agreement.
"NET BOOK VALUE" shall have the meaning set forth in Section 101 of the
Loan Agreement.
"NET CONTAINER REVENUE RECEIPTS" means, for any period of measurement, the
excess (if any) of (x) the Gross Container Revenue Receipts for such period,
over (y) the Direct Operating Expense Payments for such period.
"NET CONTAINER REVENUES" means, for any period of measurement, the excess
(if any) of (x) the Gross Container Revenues for such period, over (y) the
Direct Operating Expenses for such period.
"NET INCOME" means the net income of the Borrower as determined in
accordance with GAAP.
"NOTE" shall have the meaning set forth in Section 101 of the Loan
Agreement.
"OPINION OF COUNSEL" shall have the meaning set forth in Section 101 of
the Loan Agreement.
"OUTSTANDING" shall have the meaning set forth in Section 101 of the Loan
Agreement.
"OUTSTANDING OBLIGATIONS" shall have the meaning set forth in Section 101
of the Loan Agreement.
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Exhibit 10.1
"PAYMENT DATE" shall have the meaning set forth in Section 101 of the Loan
Agreement.
"PERMITTED LIENS" shall have the meaning set forth in Section 101 of the
Loan Agreement.
"PERSON" shall have the meaning set forth in Section 101 of the Loan
Agreement.
"PURCHASE AGREEMENT" means the Purchase Agreement, dated as of September
18, 2002, between the Borrower and Cronos Equipment (Bermuda) Ltd., as such
agreement may be amended, modified or supplemented from time to time in
accordance with its terms.
"PURCHASE PARAMETERS" shall have the meaning set forth in Section 1.1 of
the Members Agreement.
"RESTRICTED CASH ACCOUNT" shall have the meaning set forth in Section 101
of the Loan Agreement.
"SALES PROCEEDS" means, with respect to any Managed Container, the gross
proceeds of the sale or other disposition of such Managed Container and
insurance proceeds, if any, received by Manager in respect of a Casualty Loss
affecting such Managed Container, less:
1. any commission, administrative fee or other amount of cash paid,
or to be paid, in connection with such sale or other disposition (which
shall include all handling charges incurred in connection with the
delivery of such Managed Container to the point of sale and any cash paid,
or to be paid, in connection with repairs in respect of damage to such
Managed Container, as determined in the sole discretion of Manager), but
excluding the Disposition Fee;
2. the amount considered appropriate by Manager to provide reserves
for the payment of taxes, insurance, repairs or other costs and expenses
of Manager attributable to such Managed Container sold or otherwise
disposed of; and
3. all costs, expenses and fees paid by Manager in order to ensure
that such Managed Container sold or otherwise disposed of satisfies
applicable import, customs, tax and other requirements and restrictions
and that all required permits and licenses have been obtained and all
applicable fees paid;
provided, however, that all of the amounts referred to in subparagraphs 1, 2,
and 3 of this definition shall not include (i) any applicable rebate, (ii) any
amount described therein which is charged as a Direct Operating Expense, (iii)
any amount by which the reserves set aside under subparagraph 2 above exceed the
costs and expenses actually incurred by Manager for which such reserves were set
aside and (iv) any payment received by Manager or any Affiliate thereof from the
purchaser of the relevant Managed Container or any other Person in partial or
full payment of such amounts (and to the extent that no such netting occurs, the
amount of any such rebate or payment shall form part of the Sales Proceeds of
the relevant Managed Container).
"SECURITY AGREEMENT" means the Security Agreement, dated as of September
18, 2002, by Borrower in favor of the Agent.
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Exhibit 10.1
"STRUCTURING/ARRANGEMENT AGENT" means Fortis.
"STRUCTURING/ARRANGEMENT FEE" shall have the meaning set forth in Section
5.2(B) hereof.
"SUBSIDIARY" shall have the meaning set forth in Section 101 of the Loan
Agreement.
"TERMINATED MANAGED CONTAINER" means any Managed Container which is
subject to the terms of this Agreement on the Agreement Termination Date.
"TEU" means twenty (20) foot equivalent units, a standard measure of the
size of a Container.
"TRANSACTION DOCUMENTS" shall have the meaning set forth in Section 101 of
the Loan Agreement.
"TRUST ACCOUNT" shall have the meaning set forth in Section 101 of the
Loan Agreement.
"WARRANTY PURCHASE AMOUNT" shall have the meaning set forth in Section 1.1
of the Purchase Agreement.
Other capitalized terms used herein and not otherwise defined shall have the
meaning set forth in the Loan Agreement or, if not defined therein, as defined
in the Security Agreement.
2. APPOINTMENT/AGENCY.
2.1 Upon the terms and conditions hereinafter provided, Borrower hereby
appoints Cronos Containers (Cayman) Ltd. for the term set forth in Section
10 hereof to (A) administer the Borrower's business, including performance
of all of Borrower's duties and observance of all of Borrower's
obligations under this Agreement, the Loan Agreement and the Security
Agreement (the functions described in this Section (A) collectively, the
"Administrative Functions") and (B) operate, lease and manage the Managed
Containers on behalf of Borrower (the functions described in this Section
(B) collectively, the "Management Functions"). In furtherance of the
foregoing, the Borrower hereby grants to Manager the authority to enter
into, administer and terminate Leases, to sell, transfer or otherwise
dispose of the Managed Containers, to collect monies and make
disbursements on behalf of Borrower, and to manage its finances. By
executing this Agreement, Cronos Containers (Cayman) Ltd. hereby accepts
such appointment and agrees to perform the Management Functions and the
Administrative Functions upon the terms and conditions herein.
2.2 The Borrower shall at all times retain full legal and equitable title
to the Managed Containers, notwithstanding the management thereof by
Manager hereunder. Manager shall not make reference to or otherwise deal
with or treat the Managed Containers in any manner except in conformity
with this Section 2.2.
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Exhibit 10.1
2.3 Manager shall ensure that the Managed Containers shall carry livery
and other such markings as may be required for their operation in the
marine shipping service including, for each Managed Container, the
Container Identification Number of that Managed Container.
3. DUTIES/RIGHTS OF MANAGER.
3.1 (a) Manager shall operate, manage, lease and administer the Managed
Containers as part of its Fleet and shall perform all managerial and
administrative functions and provide or arrange for the provision of all
services of any nature which it considers necessary or desirable to
fulfill the Management Functions. Without prejudice to the generality of
the foregoing, Manager shall:
(i) seek Lessees, arrange for the leasing and enter into
Leases as lessor in its capacity of the agent of the Borrower,
and decide the identity of each Lessee, the period of each
Lease, the rental or other sums payable thereunder, and the
form and content of each Lease;
(ii) perform on behalf of Borrower the obligations of the
lessor under the Leases;
(iii) exercise all rights of the lessor under the Leases,
including, without limitation, in the name of Manager, the
invoicing and collection of rental and other payments due from
Lessees;
(iv) take any actions Manager deems necessary to ensure
compliance by Lessees with the terms of their Leases;
(v) log interchanges of the Managed Containers including the
return and re-lease of Managed Containers from depots;
(vi) inspect, repair, maintain, service and store the Managed
Containers to the extent Manager deems necessary for the
purposes of this Agreement, to comply with the Leases and in
accordance with Manager's maintenance and repair standards for
its Fleet;
(vii) sell (either outright or through lease/purchase
arrangements) Managed Containers in the ordinary course of its
business, including the Manager's sell/repair decision-making
procedures that are from time to time in effect; provided
that, after giving effect to sale no Asset Base Deficiency
would then result;
(viii) obtain insurance in accordance with the provisions of
Section 9 hereof and in respect of any matters which Manager
considers necessary or prudent, including, without limitation,
public liability insurance;
(ix) follow such credit policies with respect to the leasing
of the Managed Containers as it follows from time to time with
respect to its
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Exhibit 10.1
Fleet and, subject to such credit policies, Manager may, in
its sole discretion, (a) determine and approve the
creditworthiness of any Lessee (but Manager makes no
representation and warranty to Borrower as to the solvency or
financial stability of any Lessee), (b) determine that any
amount due from any Lessee is not collectible, (c) institute
and prosecute legal proceedings against a Lessee as permitted
by applicable law, (d) terminate or cancel any Lease, (e)
recover possession of Managed Containers from any Lessee, (f)
settle, compromise or release any proceeding or claim against
a Lessee in the name of Manager or, if appropriate, in the
name of Borrower, or (g) reinstate any Lease; provided,
however, that the Manager shall not materially modify its
credit policies with respect to the leasing of the Managed
Containers without the prior written consent of the Agent and
each Lender in each instance;
(x) ensure that each Managed Container carries its Container
Identification Number and other markings as may be required
for its operation in marine and intermodal shipping;
(xi) institute and prosecute claims against the manufacturers
of the Managed Containers as Manager may consider advisable
for breach of warranty, any defect in condition, design,
operation or fitness or any other non-conformity with the
terms of manufacture and/or the related sale agreement; and
(xii) prepare and deliver the reports required pursuant to
Section 7 hereof.
(b) In discharging the Administrative Functions, Manager shall
perform the following tasks:
(i) contract for the services included in the definition of
the term "Borrower Expenses" and arrange for the Borrower to
pay such amounts in accordance with the terms of the Loan
Agreement;
(ii) prepare and file all tax returns required to be filed by
Borrower, and arrange for the payment by the Borrower of all
taxes incurred by Borrower as a Borrower Expense;
(iii) in its sole discretion and in accordance with its normal
business practices, direct the Agent, in accordance with the
terms of the Loan Agreement, as to which Eligible Investments
it shall invest funds held in the Trust Account and the
Restricted Cash Account;
(iv) enter into Interest Rate Hedge Agreements on Borrower's
behalf from time to time in accordance with the provisions of
the Loan Agreement;
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Exhibit 10.1
(v) maintain Borrower's financial books and records and
prepare Borrower's financial statements;
(vi) notify each Lender and the Agent of any change in the
location of Borrower's books and records; and
(vii) arrange for such secretarial, accounting,
administrative, financial, technical, research, consulting and
legal services (other than legal services which would be a
Direct Operating Expense) as the Borrower may require from
time to time (it being understood that such consulting and
legal services constitute Borrower Expenses).
Nothing contained in this Section 3.1(b) shall be construed as an
obligation of the Manager to pay Borrower Expenses from its own funds.
3.2 In performing its Management Functions pursuant to this Agreement,
Manager shall operate the Fleet in accordance with its reasonable business
practice and without preference to ownership thereof, and no preference
will be afforded for or against the Managed Containers. Subject to the
provisions of this Section 3.2 and the express terms of the Transaction
Documents, Manager shall have absolute discretion as to the manner of
performance of its duties and the exercise of its rights under this
Agreement.
3.3 [Reserved].
4. AUTHORITY/CONSENTS.
Borrower confers on Manager all such authorities and grants all such
consents as may be necessary for Manager's performance of its duties under this
Agreement, and will, at the request of Manager, confirm any such authorities and
consents to any third parties, execute such other documents and do such other
things as Manager may reasonably request for the purpose of giving full effect
to this Agreement and enabling Manager to carry out its duties hereunder.
5. REMUNERATION.
5.1 In consideration of Manager providing the Management Functions and the
Administrative Functions, the Borrower shall pay to Manager on each
Payment Date for the immediately preceding Collection Period a fee (the
"Management Fee") in an amount equal to the sum of (A) the product of (i)
the aggregate Net Container Revenues for such Collection Period,
multiplied by (ii) eight percent (8.0%) and (B) the product of (x) the net
Sales Proceeds of each Container for such Collection Period, multiplied by
(y) five percent (5%). The Management Fee shall be payable from amounts on
deposit in the Trust Account in accordance with the terms and conditions
of Section 302 of the Loan Agreement.
5.2 In connection with each acquisition of a container by the Borrower
pursuant to the provisions of Section 3.3 herein, the Borrower shall pay
to the Person(s) set forth below on the date of such acquisition:
E15
Exhibit 10.1
(A) to the Acquisition Agent, a fee (the "Acquisition Fee") in
an amount equal to the product of (x) one and one quarter percent
(1.25%) and (y) the sum of the vendor's or manufacturer's invoice
price of such Container and all reasonable and customary inspection,
transport, and initial positioning costs necessary to put such
container in service; and
(B) to the Structuring/Arrangement Agent, a fee (the
"Structuring/Arrangement Fee") in an amount equal to the product of
(x) one and one quarter percent (1.25%) and (y) the sum of the
vendor's or manufacturer's invoice price of such Container and all
reasonable and customary inspection, transport, and initial
positioning costs necessary to put such container in service.
Each of the Acquisition Fee and the Structuring/Arrangement Fee shall be added
to the purchase price of the related Containers and shall be paid by the
Borrower on the date on which such Container is acquired by the Borrower.
5.3 In connection with each sale or other disposition of a Managed
Container by the Borrower, the Borrower shall pay to the Manager on each
Payment Date a fee (the "Disposition Fee") that is equal to the product of
(x) five percent (5%) and (y) the Sales Proceeds (exclusive of any repair
allowances) with respect to each sale of a Managed Container in the
immediately preceding Collection Period provided that such Sales Proceeds
exceeds the Net Book Value of the related Managed Container on the date of
disposition thereof. All such Disposition Fees earned in any Collection
Period shall be payable on the immediately succeeding Payment Date from
amounts on deposit in the Trust Account in accordance with the provisions
of Section 302 of the Loan Agreement.
6. PAYMENTS TO/FROM BORROWER.
6.1 The Manager shall remit to the Trust Account on a weekly basis all Net
Container Revenue Receipts and all Sales Proceeds (less any related
Disposition Fees) actually received for the immediately preceding calendar
week.
6.2 Manager's obligation under this Agreement to deposit Net Container
Revenue Receipts and all Sales Proceeds (less any related Disposition
Fees) to the Trust Account in accordance with the provisions of Section
6.1 shall be absolute and unconditional and all payments thereof shall be
made free and clear of and without any deduction for or on account of any
set-off or counterclaim or any circumstance, recoupment, defense or other
right which Manager may have against Borrower or any other Person for any
reason whatsoever (whether in connection with the transactions
contemplated hereby or any other transactions), including, without
limitation, (i) any defect in title, condition, design or fitness for use
of, or any damage to or loss or destruction of, any Managed Container,
(ii) any insolvency, bankruptcy, moratorium, reorganization or similar
proceeding by or against Manager or any other Person or (iii) any other
circumstance, happening or event whatsoever, whether or not unforeseen or
similar to any of the foregoing.
6.3 All payments hereunder shall be made in United States Dollars by wire
transfer of immediately available funds prior to 3:00 P.M., London time,
on the date of payment.
E16
Exhibit 10.1
7. COVENANTS OF MANAGER.
7.1 On or prior to each Determination Date, Manager shall deliver to the
Borrower, the Agent and each Lender, in the format which Manager uses for
its Fleet, a report as to the Managed Containers reporting: (a)
utilization rates; (b) average lease rates; (c) receivables aging; and (d)
the collections (such report, a "Monthly Lease Report").
7.2 On or prior to each Determination Date, Manager will deliver a Manager
Report to each of the Borrower, the Agent and each Lender.
7.3 On or prior to (i) each Determination Date and (ii) any date on which
an Advance is made to Borrower under the Loan Agreement, Manager will
deliver to Borrower, the Agent and each Lender an Asset Base Certificate,
calculated using the data available to Manager (x) with respect to the
Asset Base Certificate delivered on each Determination Date, as of the end
of the immediately preceding Collection Period, and (y) with respect to
the Asset Base Certificate delivered on each advance date, as of the date
of such Asset Base Certificate and after giving effect to such advance.
7.4 Manager shall provide to each of the Borrower, the Agent and each
Lender an annual confirmation of the renewal of insurance required by
Section 9.2 hereof within forty-five (45) days of each such renewal.
7.5 Manager shall provide, in the form which Manager uses for its own
operations, any other reports and information available with respect to
the Managed Containers reasonably requested by the Borrower, the Agent or
any Lender.
7.6 Manager shall maintain, at the office of its Affiliate, Cronos
Containers Limited, located at Xxx Xxx Xxxxx, Xxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxxxx XX0 0XX, England, such books and records (including
computer records) with respect to the Managed Containers as it maintains
for the Fleet and the leasing thereof, including a computer database
including the Managed Containers (containing sufficient information to
generate the List of Containers and the reports required to be delivered
pursuant to this Agreement), any Leases relating thereto, the Lessees (if
on-hire) or location (if off-hire), and their Net Book Value. Manager
shall notify the Borrower, the Agent and each Lender of any change in the
location of Manager's books and records.
7.7 Upon reasonable request, Manager shall make available (and cause any
of its Affiliates engaged in the management of the Managed Containers to
be made available) to Borrower, the Agent and each Lender, for inspection
and copying, its books, records and reports relating to the Managed
Containers and copies of all Leases or other documents relating thereto,
all in the format which Manager uses for the Fleet. Such inspections shall
be conducted during normal business hours and shall not unreasonably
disrupt Manager's business. Manager shall grant the Agent, the Borrower
and each Lender access to Manager's computer systems and data contained
therein, but not copies of the software itself. The Borrower, the Agent
and each Lender shall have the right, upon reasonable request, to inspect
the Managed Containers at any time, upon reasonable notice and to the
extent Manager has access thereto, subject to the Leases, and provided
E17
Exhibit 10.1
such inspection does not interfere with utilization of the Managed
Containers in the ordinary course of business. The Manager shall reimburse
the Borrower, the Agent and each Lender, as the case may be, for all
reasonable out-of-pocket costs and expenses of such party for any
inspections occurring during the continuance of a Manager Default.
7.8 The Manager shall provide to the Borrower, each Lender promptly after
each shall become available, all of the following: (i) written notice of
any material change in the Manager's credit and collection policy (which
determination shall be made in the reasonable discretion of the Manager),
and (ii) summaries of all management letter comments relating to the
Borrower or Manager issued by the independent accountants of the Borrower
or Manager (as the case may be) to the board of the directors of the
Borrower or Manager (as the case may be) or any of its committees that the
Borrower or the Manager, in its sole discretion, deems material.
7.9 The Manager will deliver to the Borrower, the Agent and each Lender:
(i) Immediately upon becoming aware of the existence of any
condition or event which constitutes a Manager Default or which,
with notice and lapse of time, would become a Manager Default, a
written notice describing its nature and period of existence and
what action the Manager is taking or proposes to take with respect
thereto;
(ii) As applicable and promptly upon their becoming available, one
copy of each report (including reports on Form 8-K, 10-K and 10-Q),
definitive proxy statement, registration statement (upon it becoming
effective), definitive prospectus and notices that the Manager for
and on behalf of Borrower, filed with or delivered to any securities
exchange or the Securities and Exchange Commission or any successor
agency; and
(iii) Promptly upon the Manager's becoming aware of:
(x) any threatened or pending investigation of it by any
Governmental Authority or agency, or
(y) any threatened or pending court or administrative
Proceeding which individually or in the aggregate involves the
possibility of materially and adversely affecting a material portion
of the Managed Containers or the business or financial conditions of
the Manager,
a written notice specifying the nature of such investigation or proceeding
and what action the Manager is taking or proposes to take with respect
thereto and evaluating its merits.
7.10 The Manager shall furnish or cause to be furnished to each Person who
is identified by the Agent to the Manager as a Person who was a Lender at
any time during such year and to the Agent, within a reasonable time after
the end of each calendar year, a report setting forth the amount of
principal and interest paid on each Note during such year and such other
customary factual information as any Lender reasonably requests from time
to time, to enable Lenders to prepare their tax returns. In addition, if
any class
E18
Exhibit 10.1
of Notes are issued with original issue discount, the Manager shall
provide or cause to be provided to the IRS and the Lenders information
statements with respect to original issue discount as required by the Code
or as such Lenders may reasonably request from time to time.
7.11 The Manager shall provide to each of the Members (as defined in the
Members Agreement) each of the financial reports required pursuant to the
Members Agreement.
7.12 The Manager shall deliver to the Agent and each Lender:
(i) Annual Statements -- within 120 days after the end of each
fiscal year of each of the Borrower and The Cronos Group, one copy
of:
(a) the balance sheet of the Borrower and the consolidated
balance sheet of The Cronos Group and its consolidated
subsidiaries, at the end of such fiscal year; and
(b) statements of income, retained earnings and cash flows of
the Borrower and the consolidated statements of income,
retained earnings and cash flows of The Cronos Group and its
consolidated subsidiaries for the fiscal year then ended,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and, in the case of The
Cronos Group, accompanied by an opinion of a firm of independent certified
public accountants of recognized national standing, stating that such
financial statements present fairly in all material respects the financial
condition of The Cronos Group and its consolidated subsidiaries and have
been prepared in accordance with generally accepted accounting principles
consistently applied (except for changes in application in which such
accountants concur and footnote), and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards;
(ii) Quarterly Statements -- within 60 days after the end of each
fiscal quarter of each of the Borrower and The Cronos Group, one
copy of:
(a) the balance sheets of the Borrower and the consolidated
balance sheets of The Cronos Group and its consolidated
subsidiaries, at the end of such fiscal quarter; and
(b) the statements of income, retained earnings and cash flows
of the Borrower and the consolidated statements of income,
retained earnings and cash flows of The Cronos Group and its
consolidated subsidiaries for the fiscal quarter and that
portion of the fiscal year then ended, setting forth in each
case in comparative form the figures for the equivalent
timeframe for the previous year;
(iii) SEC and Other Reports -- promptly upon their becoming
available, one copy of each report (if any), definitive proxy
statement, registration statement
E19
Exhibit 10.1
(upon it becoming effective) and definitive prospectus filed by The
Cronos Group or the Borrower with or delivered to any securities
exchange or the Securities and Exchange Commission or any successor
agency; and
(iv) Requested Information -- with reasonable promptness, but in any
event within two calendar weeks of the date requested, (A) any data
and information so requested and (B) any other publicly available
information with respect to The Cronos Group, in each case as may be
requested from time to time by the Agent or any Lender.
7.13 The Manager shall deliver to each of the Borrower, the Agent and each
Lender, within sixty (60) days after the end of each fiscal quarter, one
copy of:
(i) a certificate setting forth the calculation of EBIT Ratio of the
Borrower as of such quarter end;
(ii) a certificate setting forth the financial calculations for The
Cronos Group set forth in Section 11.1(p) and 11.1(r) hereof as of
such quarter end; and
(iii) certificate setting forth the Weighted Average Age of the
Managed Containers as of such quarter end.
7.14 Manager shall not, without the prior written consent of the Agent
amend, modify or terminate the lease agent agreement between the Manager
and Cronos Containers Limited that is in effect on the Closing Date;
provided, however, that the Manager and Cronos Containers Limited may
modify the fee arrangements set forth in the lease agent agreement without
the prior written consent of the Agent.
7.15 The Manager shall at all times comply with the Purchase Parameters,
as such Purchase Parameters may be amended or otherwise modified from time
to time. The Borrower shall provide the Manager with a copy of the
Purchase Parameters as in effect on the date hereof and shall promptly
provide to the Manager a copy of all amendments thereto, together with
evidence satisfactory to the Manager as to the approval by the board of
directors of the Borrower of each such amendment.
7.16 The Manager shall, at the Borrower's sole cost and expense and solely
to the extent that the Agent has not made such filings, execute and file
UCC financing statements, short form grants, charges and other documents,
and take such other action, in such manner and in such places as may be
required pursuant to Applicable Law or as may be reasonably requested by
the Agent, or any Lender to preserve, maintain, perfect, continue and
protect the first priority perfected security interest of the Agent, on
behalf of the Lenders, in the Collateral. The Manager or an Affiliate
thereof is holding the Leases (to the extent, but only to the extent that,
such Leases relate to the Managed Containers) on behalf of, and for the
benefit of, the Agent, on behalf of the Lenders. None of such Leases shall
have any marks or notations indicating that they have been pledged
assigned or otherwise conveyed to any Person other than the Agent, on
behalf of the Lenders.
E20
Exhibit 10.1
7.17 The Manager will comply, in all material respects, with all acts,
rules, regulations, orders, decrees and directions of any Governmental
Authority applicable to the Collateral or any part thereof; provided,
however, that the Manager may contest any act, regulation, order, decree
or direction in any reasonable manner which shall not materially and
adversely affect the rights of the Borrower, the Agent or any Lenders in
the Collateral, provided further that, with respect to any statutes
administered and the regulations promulgated by the U.S. Treasury
Department's Office of Foreign Assets Control, the Manager shall comply
with such statutes and regulations as if the Borrower were subject to the
laws of the United States.
8. WARRANTY.
8.1 THE MANAGED CONTAINERS ARE BEING DELIVERED BY BORROWER TO MANAGER "AS
IS". BORROWER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
WITH RESPECT TO THE CONDITION, MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF THE MANAGED CONTAINERS, THE ABSENCE OF LATENT OR
OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, THE ABSENCE OF OBLIGATIONS
BASED ON STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED.
8.2 MANAGER WARRANTS THAT IT WILL CARRY OUT ITS SERVICES WITH REASONABLE
CARE AND SKILL. THIS EXPRESS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES,
WHETHER EXPRESS OR IMPLIED. UNDER NO CIRCUMSTANCES SHALL MANAGER HAVE ANY
LIABILITY TO BORROWER FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES.
9. INSURANCE.
9.1 Manager shall require each Lessee of a Managed Container and depot
owners in which a Managed Container is stored to place and maintain a
primary insurance policy covering the Managed Containers against all
normally insurable risks (including, but not limited to, liability and
property casualty insurance) in amounts and on terms agreed to by Manager.
The amount of insurance coverage maintained by each Lessee shall be in the
sole discretion of Manager; provided, however, that the amount and terms
and conditions of such insurance shall be no less than that required
generally by Manager with respect to other Containers in the Fleet of a
similar type used in a similar manner by similar Lessees.
9.2 Manager shall place and maintain secondary insurance covering physical
loss, damage and liability coverage to the Managed Containers in addition
to and payable only upon the failure of the primary coverage (as referred
to in Section 9.1 hereof) upon such terms and in such amounts, and with
such deductibles, as shall be determined by Manager in its sole
discretion; provided, however, that the amount and terms and conditions of
such insurance shall be no less than that required generally by Manager
with respect to other Containers in the Fleet of a similar type used in a
similar manner by similar Lessees. Such insurance shall cover physical
damage to the Managed Containers while
E21
Exhibit 10.1
on land, afloat, in transit or at rest anywhere in the world and liability
for damage to person or property for limits of at least $2 million per
occurrence and $20 million in aggregate. Any such casualty insurance shall
be endorsed with a loss payable clause in favor of Agent with respect to
the Managed Containers, and any such liability insurance shall name the
Agent and each Lender as an additional insured. As soon as practicable and
in any event not later than 30 days following the lapse or loss of
coverage provided by such secondary insurance, Manager shall give notice
to Borrower and the Agent that such secondary insurance is no longer in
place with respect to the Managed Containers. Notwithstanding the
foregoing, Manager shall not be required to maintain such secondary
insurance unless such insurance is available in the London commercial
insurance market on terms and at premium levels that are considered
commercially reasonable by owners or operators of containers in the marine
cargo container industry.
9.3 Manager or its Affiliates may include the insurance required hereunder
in policies covering the entire Fleet, in which event the cost thereof
shall be apportioned between Borrower and the other container owners on a
pro rata basis according to proportion that the TEU of the Managed
Containers bears to the TEU of the total Containers in the Fleet. All
insurance premiums, including any premiums paid to Affiliates of Manager,
payable under such policies in the event of any loss shall be included in
Direct Operating Expense Payments on such basis.
9.4 Borrower hereby irrevocably appoints Manager as the agent of Borrower
for the purpose of receiving all monies payable under such policy or
policies of insurance as described in Sections 9.1 and 9.2 hereof, whether
effected by Manager, depots or Lessees, and Manager may give a good
discharge therefor to the insurance company for all such monies.
10. TERM; RESIGNATION BY MANAGER.
10.1 This Agreement shall come into force on the date hereof and, subject
to the provisions of Section 11 hereof, shall continue in force with
respect to a Managed Container until the earliest to occur of (i) the
receipt by the Manager of casualty loss or insurance proceeds (if any)
with respect to such Managed Container following the destruction or loss
of such Managed Container by its Lessee or other third party, (ii) the
sale or other disposition of such Managed Container by Manager pursuant to
the terms of this Agreement, (iii) the date on which such Managed
Container is repurchased or replaced pursuant to the terms of the Purchase
Agreement, and (iv) the Agreement Termination Date.
10.2 The Manager may not resign from its obligations and duties as Manager
hereunder, except (i) with the prior written consent of the Borrower, the
Agent and the Majority Lenders or (ii) upon a determination by the Manager
that the performance by Manager of its duties under this Agreement is no
longer permissible under applicable law, which determination shall be
evidenced by an Opinion of Counsel, in form and substance reasonably
satisfactory to the Borrower and the Agent, to such effect delivered to
the Agent and each Lender. No such resignation shall, to the extent
consistent with Applicable Law, become effective until the Back-up Manager
has assumed the
E22
Exhibit 10.1
responsibilities of the resigning Manager in accordance with the terms of
this Agreement and the other Transaction Documents.
11. MANAGER DEFAULT.
11.1 The existence of any of the following events or conditions beyond any
applicable grace and/or cure period shall constitute a Manager Default:
(a) Manager shall fail to (i) make any deposit to the Trust Account
within three (3) Business Days after the due date thereof, or (ii)
deliver a Manager Report or an Asset Base Certificate within three
(3) Business Days after the due date thereof or (iii) deliver any of
the financial statements set forth in Section 7.12 hereof within
fifteen (15) days after the required timeframes specified therein;
(b) Manager shall fail to carry and maintain (or cause to be carried
and maintained) liability insurance and, to the extent such
insurance is available on commercially reasonable terms, physical
loss and damage insurance with respect to the Managed Containers in
accordance with the requirements of Section 9 hereof for a period of
more than thirty (30) days from the earlier to occur of (A) an
officer of Manager obtaining actual knowledge of such failure and
(B) receipt of written notice by an officer of Manager of such
failure;
(c) Manager shall consent to the appointment of or taking possession
of all or a substantial part of its property by a receiver,
encumbrancer, liquidator or similar official, or shall admit in
writing its inability to pay its debts generally as they become due,
or shall make a general assignment for the benefit of, or a
composition with, all or some of its creditors, or shall voluntarily
commence any proceeding seeking liquidation, reorganisation or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law, or being unable to pay its debts as
they fall due shall commence negotiations with any one or more of
its creditors with a view to the general readjustment or
rescheduling of its indebtedness;
(d) any covenant (to the extent not otherwise addressed in this
Section 11), agreement or statement made by Manager in this
Agreement or in any notice or other document, certificate or
statement delivered by it pursuant hereto (including any Manager
Report or Asset Base Certificate) or in connection herewith or
therewith the breach or non-performance of which is reasonably
likely have a material and adverse effect on the Borrower, Agent or
any Lender and (where capable of remedy) such defect has not been
remedied within 30 days of the earlier to occur of (A) an officer of
Manager obtaining actual knowledge of such failure and (B) receipt
of written notice by Manager of such failure;
(e) any representation or warranty made by Manager in this Agreement
or in any notice or other document, certificate or statement
delivered by it pursuant hereto (including any Manager Report or
Asset Base Certificate) or in connection herewith or therewith the
breach or non-performance of which is reasonably
E23
Exhibit 10.1
likely to have a material and adverse effect on the Borrower, Agent
or any Lender and (where capable of remedy) such defect has not been
remedied within 30 days of the earlier to occur of (A) an officer of
Manager obtaining actual knowledge of such failure and (B) receipt
of written notice by Manager of such failure;
(f) a receiver, receiver and manager, liquidator, provisional
liquidator, administrator or other similar person shall be appointed
for Manager or a substantial part of its assets or any resolution of
the directors or shareholders of Manager shall be passed or a
petition shall be lodged for the purpose of such appointment which
shall not be revoked or set aside within 60 days of being passed or
lodged;
(g) Manager shall be insolvent or unable to pay its debts when they
fall due, or Manager shall stop, suspend or threaten to stop or
suspend payment of all or a material part of its debts or a
moratorium is agreed or declared in respect of or affecting all or a
material part of (or a particular type of) Manager's debts;
(h) a distress, attachment, execution or other legal process shall
be levied or enforced against the assets of Manager that has a
material adverse effect on the Borrower, Agent or Noteholders, such
determination to be made in the sole discretion of the Noteholders,
which shall not be revoked or set aside within 60 days of being
passed or lodged;
(i) a person entitled to the benefit of any mortgage, charge or
other encumbrance shall take possession of all or a material part of
the assets of Manager;
(j) the Independent Accountant of The Cronos Group shall resign or
otherwise be replaced and shall not have been replaced by a
replacement independent accountant within sixty (60) days after the
date of resignation or replacement;
(k) judgments are rendered against The Cronos Group which
individually or in the aggregate exceed the amount of $3,000,000
accrued for litigation contingencies by The Cronos Group in its
annual report on Form 10-K filed with the Securities and Exchange
Commission for the fiscal year ended December 31, 2003 by more than
$1,000,000, and which judgment(s) remains (i) unpaid and (ii) are
not stayed by notice of filing of an appeal, the posting of a bond,
or by agreement with the judgment creditor(s), for a period of sixty
(60) days after the entry thereof;;
(l) the institution of any legal proceeding against the Manager or
any Affiliate, which, if determined adversely, would in the
reasonable judgment of the Agent (after consultation with counsel,
including counsel for the Manager) is reasonably likely to have a
material adverse effect on the ability of the Manager to perform its
obligations hereunder;
E24
Exhibit 10.1
(m) the return of Xxxxxx X. Xxxxxxx in a management position with
the Manager or any of its Affiliates;
(n) except as permitted by Sections 13 and 21.5 hereof, Manager
assigns its interest under this Agreement;
(o) the occurrence of an Event of Default under the Loan Agreement;
(p) the Consolidated Tangible Net Worth of The Cronos Group (as
reflected in the most recently available financial statements of The
Cronos Group delivered pursuant to Section 7.12 hereof) shall be
less than an amount equal to the sum of (i) Forty-Five Million
Dollars ($45,000,000) and (ii) the product of (x) fifty percent
(50%) and (y) all consolidated net income (but not reduced for net
losses), determined in accordance with GAAP, of The Cronos Group and
its consolidated Subsidiaries for all periods commencing after
December 31, 2002;
(q) a Change of Control shall occur with respect to The Cronos
Group, unless all of the following conditions are satisfied after
giving effect to such Change of Control: (A) The Cronos Group is the
surviving entity of such sale, conveyance, contribution, transfer or
lease of all, or substantially all, of its assets to any Person, (B)
no Manager Default (or event or condition which with the giving of
notice or the passage of time or both would become a Manager
Default) would occur after giving effect to such Change of Control
and (c) after giving effect to such Change of Control, The Cronos
Group has a Consolidated Tangible Net Worth greater than or equal to
its Consolidated Tangible Net Worth at the end of the fiscal quarter
immediately preceding such Change of Control;
(r) the EBIT Ratio (measured on a consolidated basis) of The Cronos
Group shall be less than 1.10:1.0, as calculated on a rolling
six-quarter basis, as of the end of any fiscal quarter;
(s) a default by The Cronos Group or any Subsidiary of The Cronos
Group in the payment of any principal or interest on any
Indebtedness for borrowed money which, individually or in the
aggregate, exceeds Two Million Dollars ($2,000,000) beyond the
period of grace, if any, specified therefor in the applicable
instrument evidencing such Indebtedness; or the occurrence of any
event or the existence of any condition, the effect of which is to
cause or permit holders of debt more than Two Million Dollars
($2,000,000), individually or in the aggregate, of Indebtedness for
borrowed money of The Cronos Group or any Subsidiary thereof to
become due before its (or their) stated maturity date(s) or
regularly scheduled dates of payments and such event or condition
remains unremedied for more than sixty (60) days; or
(t) The Cronos Group shall fail to maintain either of the following
financial covenants as of the end of any fiscal quarter: (i) a
minimum Debt Service Coverage of 1.25 to 1.00 and (ii) a maximum
Consolidated Tangible Net Worth Leverage Ratio of 4.50 to 1.00.
E25
Exhibit 10.1
11.2 If a Manager Default shall have occurred and be continuing, the Agent
(if any amounts owing pursuant to the Loan Agreement are still
outstanding) or, in all other cases, the Borrower, shall have the right in
its discretion, in addition to any other rights or remedies that it may
have under any Applicable Law or in equity, (i) to immediately terminate
this Agreement with respect to all Managed Containers then subject to the
terms of this Agreement, (ii) subject to any right of quiet enjoyment of a
Lessee under any Managed Container then on lease, to repossess the Managed
Containers wherever located (at Borrower's sole cost and expense unless
more than 5% of the Managed Containers are located at a single depot in
which case Manager shall bear the cost and expense of the repossession of
such Managed Containers that exceed 5% of the total number of Managed
Containers in the Fleet), and (iii) to take any other such action as the
Borrower or the Agent, as the case may be, deems appropriate under the
circumstances, including assigning this Agreement to the Back-up Manager
or any other Person designated by the Agent with the written approval of
the Majority Lenders. Notwithstanding such termination pursuant to the
provisions of this Section 11.2, Borrower shall continue to receive from
the terminated Manager all Net Container Revenue Receipts due hereunder
until such repossession is effected and the Lessees make payments with
respect to the Managed Containers to the Back-up Manager.
11.3 Upon any termination of this Agreement as aforesaid, Manager shall
cooperate with Borrower in transferring management of the Managed
Containers to the Back-up Manager or any other Person designated by the
Agent with the written approval of the Majority Lenders. Such cooperation
shall include, without limitation, making available books and records
(including computer records) pertaining to Manager's activities hereunder
(including the status and location of each Managed Container), promptly
notifying Lessees of the repossession of the Managed Containers by
Borrower and/or the Back-up Manager, transferring funds belonging to
Borrower to such accounts as are designated by Borrower and/or the Back-up
Manager and taking any other action as may be reasonably requested by
Borrower and/or the Back-up Manager to ensure the orderly transfer and
repossession of the Managed Containers to Borrower or its designee. The
Manager shall promptly remit to the Back-up Manager or such other Person
as the Agent shall designate all payments received from the Lessees with
respect to the Managed Containers after the Agreement Termination Date.
The Manager hereby agrees to transfer to the Back-up Manager copies of its
electronic records and all other records, correspondence and documents
relating to the Managed Containers in the manner and at such times as the
Back-up Manager shall reasonably request and do any and all other acts or
things necessary or appropriate to effect the purposes of termination.
11.4 During the period commencing on the date on which the Borrower acting
at the direction of the Agent have terminated this Agreement, a firm of
Independent Accountants reasonably satisfactory to the Borrower, acting at
the direction of the Agent, will review for each month the Manager's
calculation of the Net Container Revenue Receipts. The reasonable expense
of such accountants shall be for the account of the replaced Manager. Such
Independent Accountants will provide a report to the Agent, each Lender,
the Manager and the Borrower, coincident with the delivery of each Manager
Report, as to the conformity of such calculations with the terms of the
Manager Report.
E26
Exhibit 10.1
11.5 Manager, irrevocably and by way of security to Borrower for the
obligations of Manager herein, appoints Agent to be its attorney-in-fact
in the event that Manager Default shall have occurred and be continuing
(with full power to appoint substitutes and to delegate, including power
to authorize the Person so appointed to make further appointments) on
behalf of Manager and in its name or otherwise to execute any document,
with power to date the same, and to give any notice and to do any act or
thing which Manager is obliged to execute or do, under this Agreement or
otherwise, and which Manager fails to do after reasonable request therefor
by Borrower or Agent; and any person appointed as the substitute or
delegate of Agent shall, in connection with the exercise of the said power
of attorney, be the agent of Manager. Manager hereby ratifies and confirms
and agrees to ratify and confirm whatever any such attorney shall do or
propose to do in the exercise or purported exercise of all or any of the
powers, authorities and discretion referred to in this paragraph.
11.6 Upon the occurrence of a Manager Default, Manager and Borrower shall
take reasonable direction in accordance with this Agreement from, and
fully cooperate with, Agent. The prior written consent of the Agent must
be obtained in order to waive any Manager Default or any or all of its
consequences. Upon any such waiver of a past default, such default shall
cease to exist, and any default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived.
11.7 In no event shall Manager be required to act in any manner
inconsistent with the rights of Lessees under any Leases related to the
Managed Containers.
11.8 Termination of this Agreement shall be without prejudice to the
rights and obligations of the parties which have accrued prior to such
termination; provided, however, that any amount then due to Manager shall
be reduced by the reasonable and necessary out-of-pocket costs incurred by
Borrower, the Agent and the Back-up Manager in connection with the removal
and replacement of Manager.
12. NON-EXCLUSIVITY.
During the term of this Agreement, Manager may provide services (similar
or dissimilar) directly or indirectly to any other Person or on behalf of any
other Person.
13. SUB-CONTRACTORS AND AGENTS.
Borrower hereby consents to and agrees that, in performing its duties
hereunder, Manager may further contract with its Affiliates or Subsidiaries to
provide any or all services to be provided by Manager, provided that Manager
shall remain primarily liable for all services which its Affiliates have
contracted to perform. Borrower further consents to and agrees that Manager
shall be entitled to appoint subcontractors or agents who are not its Affiliates
or Subsidiaries to carry out any portion of its duties hereunder; provided,
however, that (i) Manager shall remain primarily liable for all such services
and (ii) the Agent shall have given its prior written consent to each such
appointment.
E27
Exhibit 10.1
14. LIENS.
Manager agrees not to create, incur, assume or grant, or suffer to exist,
directly or indirectly, any lien, security interest, pledge or hypothecation of
any kind on or concerning the Managed Containers, title thereto or any interest
therein or in this Agreement to any Person other than Borrower, except (i) liens
for taxes not yet due or being contested in good faith by appropriate
proceedings so long as such proceedings do not involve any material danger of
the sale, forfeiture or loss of any Managed Container, (ii) materialmen's,
mechanics', workmen's, repairmen's or other similar liens arising in the
ordinary course of business (including those arising under maintenance
agreements entered into in the ordinary course of business) securing obligations
that are not overdue or are being contested in good faith by appropriate
proceedings so long as such proceedings do not involve any material danger of
the sale, forfeiture or loss of any Managed Container and (iii) the Liens
created pursuant to the Transaction Documents. Manager will promptly, at its
expense, take or cause to be taken such actions as may be necessary duly to
discharge any such lien not excepted above if the same shall arise at any time.
15. NO PARTNERSHIP.
Nothing in this Agreement shall be deemed to constitute a partnership
between the parties hereto.
16. FORCE MAJEURE.
Neither party shall be deemed to be in breach of its obligations hereunder
nor shall it be liable to the other for any loss or damage which may be suffered
as a direct or indirect result of the performance of any of their respective
obligations being prevented, hindered or delayed by reason of any Force Majeure
circumstances. "Force Majeure circumstances" shall mean any act of God, war,
riot, civil commotion, strike, lock-out, trade dispute or labor disturbance,
accident, breakdown of plant or machinery, explosion, fire, flood, difficulty in
obtaining workmen, materials or transport, government action, epidemic,
difficulty or impossibility in obtaining access to any of the Managed
Containers, or other circumstances whatsoever outside the control of such party
affecting the performance of such party's duties hereunder.
17. CURRENCY/BUSINESS DAY.
17.1 All sums payable under this Agreement shall be paid in U.S. Dollars.
17.2 Notwithstanding anything to the contrary contained herein, if any
date on which a payment becomes due hereunder is not a Business Day, then
such payment may be made on the next succeeding Business Day with the same
force and effect as if made on such scheduled date.
18. INDEMNIFICATION.
18.1 Borrower shall defend, indemnify and hold Manager and its Affiliates
and their respective shareholders, officers, directors, agents and
employees (collectively, "Manager Indemnified Parties") harmless from and
against any Claims or Losses (defined as including all claims, actions,
damages, expenses, losses or liabilities, including, without
E28
Exhibit 10.1
limitation, reasonable attorneys' fees and other out-of-pocket expenses,
incurred in defending against such Claims or Losses) asserted against, or
incurred by, any Manager Indemnified Party and arising with respect to the
Managed Containers or the services rendered by the Manager to the Borrower
(including Administrative Functions and Management Functions) pursuant to
the terms of this Agreement; provided, however, that the foregoing
indemnity shall not apply to any Claims or Losses to the extent caused by,
or arising from, (i) the gross negligence or the willful misconduct of the
Manager in the case of the Administrative Functions, (ii) the negligence,
gross negligence or willful misconduct of Manager in the case of the
Management Functions, (iii) a breach by the Manager of its contractual
obligations hereunder (other than with respect to the Administrative
Functions) or (iv) any material misrepresentation made by the Manager
herein. Manager hereby subordinates its claims under this Section 18.1 to
all claims which have priority in payment under Section 302 of the Loan
Agreement, and further agrees that any such claims shall only be payable
at the times and in the amounts for which funds are available for such
purpose pursuant to Section 302 of the Loan Agreement; provided, however,
that no such subordination of the Manager shall apply to any amounts that
would otherwise be included in the definition of Direct Operating Expense
Payments set forth herein.
18.2 Cronos Containers (Cayman) Ltd., in its capacity as the initial
Manager, agrees to, and hereby does, indemnify and hold harmless the
Borrower, its assignees and their respective officers, directors,
employees and agents (each of the foregoing, an "Indemnified Party")
against any and all liabilities, losses, damages, penalties, costs and
expenses (including costs of defense and legal fees and expenses) which
may be incurred or suffered by any Indemnified Party (except to the extent
caused by the negligence or willful misconduct of any Indemnified Party)
as a result of claims, actions, suits or judgments asserted or imposed
against an Indemnified Party and arising out of (i) breach by the Manager
of its covenants and obligations hereunder related to the Management
Functions or (ii) a material breach by the Manager of its representations
and warranties set forth in this Agreement; provided, however, that the
indemnity obligation of Cronos Containers (Cayman) Ltd. pursuant to this
Section 18.2 shall not extend to any consequential, indirect or special
damages incurred by any Indemnified Party except for losses incurred by
the Lenders under the Loan Agreement as a result of the conditions or
events described in Sections (i) and (ii) of this Section 18.2. The
parties hereto hereby agree that (i) nothing contained in this Section
18.2 shall be interpreted as an implicit or explicit guarantee by Cronos
Containers (Cayman) Ltd. of the payment of the principal balance of, or
accrued interest on, the Notes and (ii) losses on the Notes may occur for
various reasons including, but not limited to, the financial inability of
the Lessee to make rental payments and/or the inability of the Manager to
re-lease containers in sufficient amounts or at sufficient rates to repay
the Notes.
18.3 The obligations of the Borrower and the Manager under Sections 18.1
and 18.2 hereof, respectively, shall survive the termination of this
Agreement.
19. NO BANKRUPTCY PETITION AGAINST BORROWER.
E29
Exhibit 10.1
Manager will not, prior to the date that is one (1) year and one (1) day
after the payment in full of the aggregate Outstanding Obligations, institute
against Borrower, or join any other Person in instituting against Borrower, an
Insolvency Proceeding. This Section 19 shall survive the termination of this
Agreement.
20. REPRESENTATIONS AND WARRANTIES.
20.1 Manager represents and warrants to Borrower that:
(a) The Manager is a corporation duly organized and validly existing
and in compliance under the laws of the Cayman Islands;
(b) The Manager has the requisite power and authority to enter into
and perform its obligations under this Agreement, and all requisite
corporate authorizations have been given for it to enter into this
Agreement and to perform all the matters envisaged hereby. Upon due
execution and delivery hereof this Agreement will constitute the
valid, legally binding and enforceable obligation of Manager,
subject to bankruptcy, insolvency, moratorium, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(c) The Manager has not breached its memorandum and articles of
association or any other agreement to which it is a party or by
which it is bound in the course of conduct of its business and
corporate affairs or any applicable laws and regulations of the
Cayman Islands in such manner as would in any such case have a
materially adverse effect on its ability to perform its obligations
under this Agreement;
(d) The consummation of the transactions contemplated by and the
fulfillment of the terms of this Agreement will not conflict with,
result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a
default under, the memorandum and articles of association of
Manager, or any material term of any indenture, agreement, mortgage,
deed of trust, or other instrument to which Manager is a party or by
which it is bound, or result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust, or other instrument,
or violate any law or any order, rule, or regulation applicable to
Manager of any court or of any federal or state regulatory body,
administrative agency, or other Governmental Authority having
jurisdiction over Manager or any of its properties; and
(e) There are (i) no proceedings or investigations pending, or, to
the knowledge of Manager, threatened, before any court, regulatory
body, administrative agency, or other tribunal or Governmental
Authority (A) asserting the invalidity of this Agreement, (B)
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, or (C) seeking any determination or
ruling that might materially and adversely affect the performance
E30
Exhibit 10.1
by Manager of its obligations under, or the validity or
enforceability of, this Agreement; and (ii) no injunctions, writs,
restraining orders or other orders in effect against Manager that
would adversely affect its ability to perform under this Agreement.
(f) A true, complete and correct copy of the Lease Agent Agreement
between the Manager and Cronos Company Limited is attached as
Exhibit C hereto.
20.2 Borrower represents and warrants to Manager that:
(a) Borrower is a limited liability company duly organized, validly
existing and in compliance under the laws of Bermuda;
(b) Borrower has the requisite power and authority to enter into and
perform its obligations under this Agreement, and all requisite
corporate authorizations have been given for it to enter into this
Agreement and to perform all the matters envisaged hereby. Upon due
execution and delivery hereof this Agreement will constitute the
valid, legally binding and enforceable obligation of Borrower,
subject to bankruptcy, insolvency, moratorium, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(c) Borrower has not breached its memorandum of association or
bye-laws or any other agreement to which it is a party or by which
it is bound in the course of conduct of its business and corporate
affairs or any applicable laws and regulations of Bermuda in such
manner as would in any such case have a materially adverse effect on
its ability to perform its obligations under this Agreement;
(d) The consummation of the transactions contemplated by and the
fulfillment of the terms of this Agreement will not conflict with,
result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a
default under, the memorandum of association or bye-laws of
Borrower, or any material term of any indenture, agreement,
mortgage, deed of trust, or other instrument to which Borrower is a
party or by which it is bound, or result in the creation or
imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement, mortgage, deed of trust, or
other instrument, or violate any law or any order, rule, or
regulation applicable to Borrower of any court or of any federal or
state regulatory body, administrative agency, or other Governmental
Authority having jurisdiction over Borrower or any of its
properties; and
(e) There are (i) no proceedings or investigations pending, or, to
the knowledge of Borrower, threatened, before any court, regulatory
body, administrative agency, or other tribunal or Governmental
Authority (A) asserting the invalidity of this Agreement, (B)
seeking to prevent the consummation of any
E31
Exhibit 10.1
of the transactions contemplated by this Agreement, or (C) seeking
any determination or ruling that might materially and adversely
affect the performance by Borrower of its obligations under, or the
validity or enforceability of, this Agreement, and (ii) no
injunctions, writs, restraining orders or other orders in effect
against Borrower that would adversely affect its ability to perform
under this Agreement.
21. GENERAL.
21.1 All notices, demands or requests given pursuant to this Agreement
shall be in writing, sent by internationally-recognized, overnight courier
service or by telefax or hand delivery to the following addresses:
To Manager: Cronos Containers (Cayman) Ltd.
X.X. Xxx 00000 SMB
Queensgate House
Xxxxxx Town Grand Cayman
Cayman Islands
Telephone:
Telefax:
Attention:
with a copy to:
Cronos Containers Limited
Xxx Xxx Xxxxx
Xxxx Xxxxxx
Xxxxxx
Xxxxxxxxxxxxxxx XX0 0XX
Xxxxxxx
Telephone: 44 1628.405580
Telefax: 44 1628.405648
Attention: Xxxxx X. Xxxxxxx
To Borrower: CF Leasing Ltd.
Xxxxxxxxx Xxxxx
Xxxxxx Xxxxxx
Xxxxxxxx XX 00, Xxxxxxx
Telephone: 000 000-0000
Fax: 000 000-0000
Attention: Secretary
To the Agent: Fortis Bank (Nederland) N.V.
Xxxxxxxxxx 00/0
X.X. Xxx 000
0000 XX Xxxxxxxxx
Xxx Xxxxxxxxxxx
E32
Exhibit 10.1
Telephone: 00-00-000-0000
Telefax: 31 10 401 63 43
Attention: Menno Van Lacum
To any Lender: At its address as set forth in the Loan Agreement.
Notice shall be effective and deemed received (a) two (2) days after being
delivered to the courier service, if sent by courier, (b) upon receipt of
confirmation of transmission, if sent by telecopy, or (c) when delivered,
if delivered by hand.
21.2 If any proceeding is brought for enforcement of this Agreement or
because of an alleged dispute, breach, default, in connection with any
provision of this Agreement, the prevailing party shall be entitled to
recover, in addition to other relief to which it may be entitled,
reasonable attorney fees and other costs incurred in connection therewith.
21.3 Borrower and Manager shall each perform such further acts and execute
such further documents as may be necessary to implement the intent of, and
consummate the transactions contemplated by, this Agreement.
21.4 If any term or provision of this Agreement or the performance thereof
shall to any extent be or become invalid or unenforceable, such invalidity
or unenforceability shall not affect or render invalid or unenforceable
any other provision of this Agreement and this Agreement shall continue to
be valid and enforceable to the fullest extent permitted by law.
21.5 This Agreement shall be binding upon and inure to the benefit of, and
be enforceable by, Borrower and Manager, and their respective successors
in interest or permitted assigns; provided, however, that this Agreement
and the rights and duties of Manager hereunder may not be assigned by
Manager to any other Person, other than an Affiliate or Subsidiary of
Manager, without obtaining the prior written consent of Borrower and the
Agent (acting at the direction of the Lenders). The Manager hereby
acknowledges and agrees that Borrower shall assign all of its rights,
title and interest under this Agreement to the Agent on behalf of the
Lenders. Manager hereby consents to such assignment and agrees that the
Agent may enforce the rights and remedies of the Borrower hereunder.
21.6 Waiver of any term or condition of this Agreement (including any
extension of time required for performance) shall be effective only if in
a written instrument signed by each of the Manager, the Borrower and the
Agent at the direction of the Majority Lenders and shall not be construed
as a waiver of any subsequent breach or waiver of the same term or
condition or a waiver of any other term or condition of this Agreement. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver hereof.
21.7 The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
E33
Exhibit 10.1
21.8 This Agreement represents the entire agreement between the parties
with respect to the subject matter hereof. The terms of this Agreement may
be amended, modified or waived only by a written instrument signed by the
Manager, the Borrower and the Agent. The Borrower shall forward copies of
any amendment to this Agreement to the Agent and each Lender.
21.9 This Agreement may be signed in two or more counterparts each of
which shall constitute an original instrument, but all of which together
shall constitute but one and the same instrument.
21.10 Any signature required with respect to this Agreement may be
provided via facsimile or by electronic means and shall in either case be
equally effective as the delivery of an originally executed counterpart.
21.11 This Agreement shall be governed by and construed in accordance with
the substantive laws of the State of New York of the United States of
America (without regard to choice of law principles) applicable to
agreements made and to be performed therein and the obligations, rights,
and remedies of the parties under this Agreement shall be determined in
accordance with such laws. Any legal suit, action or proceeding against
Borrower or Manager arising out of or relating to this Agreement, or any
transaction contemplated hereby, may, be instituted in any federal or
state court in the City of New York, State of New York, and each of the
Borrower and the Manager hereby waive any objection which it may now or
hereafter have to the laying of venue of any such suit, action or
proceeding, and, solely for the purposes of enforcing this Agreement,
Borrower and Manager each hereby irrevocably submits to the jurisdiction
of any such court in any such suit, action or proceeding. Each of Borrower
and Manager hereby irrevocably appoints and designates CT Corporation
System, having an address at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
its true and duly authorized agent for the limited purpose of receiving
and forwarding legal process in any such suit, action or proceeding, and
each of Borrower and Manager agrees that service of process upon such
party shall constitute personal service of such process on such Person.
Each of Borrower and Manager shall maintain the designation and
appointment of such authorized agent until the termination of this
Agreement; provided, however, if such agent shall cease to so act, each of
Borrower and Manager shall immediately designate and appoint another such
agent and each shall promptly deliver to the other evidence in writing of
such other agent's acceptance of such appointment.
21.12 The parties hereto acknowledge that the Agent, its successors and
assigns are each an express third party beneficiary of this Agreement.
[Signature page follows.]
E34
Exhibit 10.1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
CF LEASING LTD.
By: /s/ XXXXXX X XXXXX
Title Director
Date: _________________________________
CRONOS CONTAINERS (CAYMAN) LTD.
By: /s/ XXXXX X XXXXXXX
Title Director
Date: _________________________________
E35
Exhibit 10.1
FORTIS BANK (NEDERLAND) N.V., as Agent
By: /s/ M.A.N. VAN LACUM
Title _________________________________
Date: _________________________________
By: /s/ P.R.G.ZAMAN
Title _________________________________
Date: _________________________________
E36
Exhibit 10.1
EXHIBIT A
FORM OF MANAGER REPORT
CF LEASING LTD. ("BORROWER")
FORM OF MANAGEMENT REPORT BY CRONOS CONTAINERS CAYMAN LTD ("MANAGER")
FOR THE COLLECTION PERIOD ENDED JULY 31, 2004.
SECTION 1: NET LEASE REVENUE AND AVAILABLE FUNDS US$
-------------------
1 Gross Lease Revenue for Period
2 Direct Finance Lease Income for Period
3 Less: Direct Operating Expenses
4 Net Container Revenue & Direct Finance Lease Income (Line 1 plus line 2
less line 3):
-------------------
5 Management Fee for Period = 8% of Line 4: 0
-------------------
-------------------
6 Amount available in Trust Account:
-------------------
7 Amount available in Restricted Cash Account:
-------------------
SECTION 2: DETAIL OF DIRECT OPERATING EXPENSES
8 Direct Operating Expenses (Line 2):
9 Maintenance and Repair Expense
10 Storage Expense
11 Repositioning Expense
12 Handling Expense
13 Capital Improvements
14 Other Expenses
15 Total Operating Expenses (as reported above in Line 3 & 7):
SECTION 3: NORMAL DISTRIBUTION AT PAYMENT DATE
Providing none of the answers in Section 4 is Y US $
-------------------
16 To Manager: Management Fee
17 To Hedge Providers: payments other than hedge termination payments
18 To Agent: fees and expenses
19 To Persons: Borrower Expenses & DOC
20 To Class A Note Lenders: Interest and Commitment Fees
21 To Class B Note Lenders: Interest and Commitment Fees
22 To Restricted Cash Account: any amount to restore the Restricted Cash
Requirement
23 To Class A Note Lenders: Principal payment
24 To Class B Note Lenders: Principal payment (only if there is no Aggregate
Class A Principal Balance outstanding)
25 To each Lender: Overdue Interest
26 To Hedge Providers: hedge termination payments
27 To Manager: Disposition Fees and Indemnification Payments
28 To Borrower or designee: remaining Distributable Cashflow
E37
Exhibit 10.1
SECTION 4: EVENT OF DEFAULT CHECKLIST Y/N
29 Is the principal balance of the Notes outstanding larger than the Asset Base? N
30 Did Manager fail to make a deposit to the Trust Account within a particular week? N
31 Did Manager fail to deliver Distribution Report, or Asset Base
Certificate with 3 days after the related Determination Date? N
32 Did Manager fail to deliver Financial Statements within 10 days of required timeframe? N
33 Did Manager fail to carry/maintain insurance? N
34 Has Manager appointed receiver, or similar? N
35 Is Manager in breach of any covenant? N
36 Is Manager in breach of any representation or Warranty? N
37 Has Manager had a receiver or similar appointed? N
38 Is Manager insolvent? N
39 Has a distress, attachment, execution or other legal process been levied against the
assets of Manager? N
40 Has a person entitled to the benefit of any mortgage charge or other encumbrance
taken possession of all/material part of the assets of Manager? N
41 Have the auditors of The Cronos Group resigned and no replacement been found within
60 days? N
42 Are there any judgments rendered against The Cronos Group in the aggregate exceeding
$1,000,000 N
43 Has Xxxxxx X. Xxxxxxx returned in a management position within The Cronos Group? N
44 Has The Cronos Group, the Manager or any subsidiary defaulted on payment of any
principal or interest on any indebtedness for borrowed money in excess of $2,000,000? N
45 Is there an Event of Default under the Loan Agreement or any of the other related
documents? N
46 Has The Cronos Group failed to deliver its Financial statements within 10 days of the
required timeframe? N
47 Has there been an event causing any acceleration of debt of more than $2,000,000? N
48 Have any of the officers/directors activities violated securities law? N
49 Is the EBIT Ratio of Borrower less than 1.1:1.0 on a 6 quarter rolling basis? N
50 Is the EBIT Ratio of The Cronos Group less than 1.1 : 1.0 on a 6 quarter rolling basis? N
51 Is the Tangible Net Worth of The Cronos Group less than $45 million and 50% of the
retained earnings after December 31, 2002? N
52 Have Borrower, The Cronos Group or the Manager failed to comply with any covenant? N
53 Is the Weighted Average age of the Equipment greater than 6 years? N
54 Is there any legal proceeding against the manager or any affiliates which will have an
adverse effect on their ability to perform their obligations N
55 Has Borrower filed voluntary liquidation? N
56 Is the balance on the Restricted Cash Account less than required? N
57 Has a Change of Control occurred with respect to The Cronos Group, whereby it is not
the surviving entity? N
E38
Exhibit 10.1
EXHIBIT B
FORM OF ASSET BASE CERTIFICATE
CF LEASING LIMITED
ASSET BASE CERTIFICATE (NO )
AS AT [ ], 200[ ]
US$
---
1 COST
1.1 Opening Total Cost of Container Equipment at Closing
--------------
1.2 Cost of Additions since Closing
--------------
1.3 Cost of Retirements of Container Equipment since Closing
--------------
1.4 Closing Total Cost of Container Equipment per above date (lines 1.1 + 1.2 - 1.3) 0
--------------
2 DEPRECIATION
2.1 Opening Total Depreciation of Container Equipment at Closing
--------------
2.2 Depreciation of Container Equipment Since Closing 0
--------------
2.3 Depreciation on Retirements of Container Equipment net of reinstatements
--------------
2.4 Closing Total Depreciation of Container Equipment per above date (lines 2.1 + 2.2 -
2.3) 0
--------------
3 NET BOOK VALUE
3.1 Net Book Value of Container Equipment at Closing (lines 1.1 - 2.1) 0
3.2 Net Book Value of Container Equipment as per above date (lines 1.4 - 2.4) 0
--------------
3.2.1 Net Book Value of CPC containers as per above date (CJ2)
--------------
3.2.2 Net Book Value of Tank containers as per above date (TJ1, TJ2)
--------------
3.2.3 Net Book Value of General Purpose Equipment as per above date (DJ1,DJ2)
--------------
3.2.4 Net Book Value of Refrigerated Equipment as per above date (RJ1,RJ2)
--------------
3.2.5 Net Book Value of Open Top Equipment as per above date (OJ2)
--------------
3.3 NET BOOK VALUE OF CONTAINER EQUIPMENT AS PER ABOVE DATE (AS PER LINE 3.2) 0
--------------
4 RESTRICTED CASH ACCOUNT
--------------
4.1 Restricted Cash Account Balance as per Determination Date
--------------
4.2 Restricted Cash Account Requirement as per Payment Date 0
--------------
4.3 EXCESS (DEFICIT) ON RESTRICTED CASH ACCOUNT AS PER PAYMENT DATE (4.1-4.2) 0
--------------
5 TRUST ACCOUNT
5.1 Trust Account Balance as per Determination Date
--------------
5.2 Principal Class A Notes due as per Payment Date
--------------
5.3 Interest Class A Notes due as per Payment Date
--------------
5.4 Principal Class B Notes due as per Payment Date
--------------
5.5 Interest Class B Notes due as per Payment Date
--------------
5.6 Total Class A and Class B Note obligation as per Payment Date (5.2+5.3+5.4+5.5) 0
--------------
5.7 To Persons: Borrower Expenses & DOC
--------------
5.8 To Agent: fees and expenses
--------------
5.9 Cash to be transferred to the Restricted Cash Account
--------------
5.10 Expected debt service obligation for the NEXT Payment Date
--------------
5.11 Management Fee - Other
--------------
5.12 EXCESS (DEFICIT) ON TRUST ACCOUNT AS PER PAYMENT DATE (5.1-5.9) 0
--------------
6 OTHER ASSETS
E39
Exhibit 10.1
--------------
6.1 Finance Lease Receivable
--------------
7 AGGREGATE ASSET BASE
7.2.1 80 % of line 3.2.1 0
7.2.2 70 % of line 3.2.2 0
7.2.3 80 % of line 3.2.3 0
7.2.4 80 % of line 3.2.4 0
7.2.5 100% of line 4.1 0
7.2.6 100% of line 5.12 0
7.2.7 80% of line 6.1 0
--------------
7.3 AGGREGATE ASSET BASE (LINE 7.2) 0
--------------
8 CLASS A AND B NOTE OUTSTANDING
--------------
8.1 Class A Note outstanding as per Determination Date
--------------
8.2 Class B Note outstanding as per Determination Date
--------------
8.3 Class A and B Note outstanding as per Determination Date 0
--------------
8.4 Class A Note drawdown (reduction) as per Payment Date
--------------
8.5 Class B Note drawdown (reduction) as per Payment Date
--------------
8.6 Class A Note outstanding as per Payment Date 0
--------------
8.7 Class B Note outstanding as per Payment Date 0
--------------
8.8 CLASS A AND B NOTE OUTSTANDING AS PER PAYMENT DATE 0
--------------
9 CLASS A NOTE ASSET BASE AND AVAILABILITY
9.1 Maximum availability
9.2 Asset Base (Aggregate Asset Base less Note B Principal Balance) 0
9.3 Outstanding as per Payment Date (line 8.6) 0
9.4 Asset base availability (deficit) as per Payment Date 0
9.5 Maximum loan availability (9.1-9.3) 0
--------------
9.6 FUNDS AVAILABLE FOR DRAWING (LESSER OF 9.4 AND 9.5) 0
--------------
10 CLASS B NOTE AND AVAILABILITY
10.1 Maximum availability
10.2 Outstanding as per Payment Date (line 8.7) 0
10.3 Maximum loan availability 0
--------------
10.4 FUNDS AVAILABLE FOR DRAWING 0
--------------
11 MANDATORY PREPAYMENT SUMMARY
11.1 Trust Account Deficit (incl.deficit on Restricted Cash Account if any) 0
11.2 Note A Asset Base Deficit 0
11.3 Note B Asset Base Deficit 0
12 ADVANCE RATES
12.1 Note A advance rate on NBV of assets in Asset Base as per Payment Date
12.2 Note A and B advance rate on NBV of assets in Asset Base as per Payment Date
The undersigned, an Authorized Signatory, hereby certifies that to the
best of his knowledge and belief the Asset Base Certificate has been
compiled in keeping with the requirements of the Loan Agreement.
AUTHORIZED SIGNATORY
E40
Exhibit 10.1
EXHIBIT C
COPY OF LEASE AGENT AGREEMENT
[LOGO]
LEASING AGENT AGREEMENT
CRONOS CONTAINERS (CAYMAN) LIMITED
AND
CRONOS CONTAINERS LIMITED
THIS LEASING AGENT AGREEMENT (the "Agreement") is entered into as of this 1st
day of January 2002, by and between Cronos Containers (Cayman) Limited, a
compnay incorporated under the laws of the Cayman Islands (hereinafter, "CAY")
and Cronos Containers Limited, an English corporation (hereinafter, the "Leasing
Agent"). This agreement supersedes and replaces all prior agreements concerning
the subject matter hereof between the parties.
RECITALS
WHEREAS, CAY and the Leasing Agent are both wholly owned subsidiaries of The
Cronos Group, a Luxembourg corporation.
WHEREAS, CAY is in the business of managing marine cargo containers on behalf of
owners of containers.
WHEREAS, the Leasing Agent has previously contracted with CAY to provide
container leasing services to CAY and the owners for whom it manages containers.
WHEREAS, CAY has determined that, although it will manage containers for owners
of such containers, it will not perform all functions required to lease the
containers in the container leasing business. The Leasing Agent has agreed to be
responsible for container leasing on behalf of CAY and for the Cronos Group and
the owners of the containers when required.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual provisions contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the respective
meanings set forth:
E41
Exhibit 10.1
"BANKRUPTCY" as used in Section 11(c) of this Agreement refers to the
following events: (i) an order for relief entered against any party under
any applicable bankruptcy or insolvency law, or (ii) any party (A) making
a general assignment for the benefit of creditors; (B) filing a voluntary
petition under any applicable bankruptcy or insolvency law; (C) filing a
petition or answer seeking reorganisation, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation; (D) filing an answer or other pleading
admitting or failing to contest the material allegations of a petition
filed against it in any proceeding of said nature; or (E) seeking,
consenting to, or acquiescing in the appointment of a trustee, receiver,
or liquidator of all or any substantial part of its assets and properties.
"CAPITAL IMPROVEMENTS" mean any structural changes required to be made to
the containers so as to conform with applicable governmental or industrial
standards.
"CONTAINERS" refers to marine dry cargo containers and special purpose
containers (including, but not limited to, refrigerated containers, open
top containers, tank containers, bulk containers, cellular palletwide
containers, rolltrailers and flat rack containers) owned or leased or
managed by CAY on its own behalf or on behalf of the Cronos Group or any
third party container owner, now or at any time in the future.
"CONTAINER OWNERS" refers to the beneficial owners of the containers,
including subsidiaries or affiliates of CAY and of the Leasing Agent.
"DELIVERY CHARGES" means the costs incurred in transporting containers
from the Manufacturers' production facility to the point of the first
lease-out.
"EFFECTIVE DATE" means the 1st day of January 2002.
"GROSS LEASE REVENUE" refers to the gross revenues accrued by CAY or the
Leasing Agent for and on behalf of the container owners from the leasing
of the containers (prior to the deduction of any expenses incurred in
connection therewith), but shall not include proceeds from the sale of
containers. Such Gross Lease Revenue for a given period of time shall
include all proceeds accrued from operations related to the containers
during such period, including, but not limited to, per diem charges,
pick-up and turn-in charges, penalties for each termination,
transportation, realised exchange differences, pre-trip inspection, direct
interchange charges, handling and repair charges, off-hire service charges
and other charges relating to or arising from the leasing of the
containers. Gross Lease Revenue also includes all other revenue
attributable to the containers, including funds received from
manufacturers or others in settlement of claims, losses, disputes or
proceedings relating to or arising out of the leasing of the containers,
bankruptcy or retrieval insurance proceeds for lost lease revenues, and
returned insurance premiums.
"PERSON" means an individual, partnership, corporation, trust, or other
entity.
"MANAGEMENT AGREEMENTS" collectively refers to all the management
agreements under which CAY contracts with the container owners to manage
the containers.
"NET LEASE REVENUE" for a given period of time shall mean Gross Lease
Revenues less Direct Operating Expenses.
"DIRECT OPERATING EXPENSES" shall include:
1) all uncollectible accounts receivable from lessees, including any
reasonable reserve for bad debts.
2) all fixed and variable operating expenses and costs related to the
operation and management of all the containers managed, operated or
leased by the Leasing Agent. Such fixed and variable operating expenses
and costs include, but are not limited to, all expenses of maintaining,
repairing, refurbishing, storing, positioning and handling the
containers, agent expense reimbursement and commissions, legal fees,
spare parts, charges, assessments or levies of whatever kind or nature
imposed upon or against the containers, ad valorem, gross receipts and
other property taxes or other taxes which are levied against the
containers or the gross rental therefrom, legal and accounting fees
relating to operation of the containers, and the cost of any
examination, investigation or other proceedings conducted by any
regulatory body relating to operation of the containers.
Notwithstanding the above, these fixed and
E42
Exhibit 10.1
variable operating costs and expenses shall not include marketing,
general, and administrative expenses of the Leasing Agent or any charge
or expense paid by a third party lessee or other person not a container
owner and not reimbursable to such lessee or other person.
"SALE" means any sale, exchange or other disposition of containers, any
recovery of damage or insurance proceeds (other than business or rental
interruption proceeds), or any debt refinancing.
2. EMPLOYMENT AS LEASING AGENT
Cronos Containers (Cayman) Limited hereby retains the Leasing Agent to
provide for the leasing and management of the containers, pursuant to the
terms and conditions of this Agreement, and the Leasing Agent hereby
agrees to provide such leasing and management services and hereby accepts
the terms, conditions, covenants and agreements contained herein.
3. LEASING AGENT'S DUTIES
Subject to the direction and supervision of CAY, the Leasing Agent shall
provide the following services, including the taking of all actions and
the hiring of all personnel necessary or appropriate to perform such
services:
A. LEASE INITIATION
1) From and after the Effective Date, the Leasing Agent shall
provide or arrange for the provision of all lease initiation
and maintenance services required to operate and lease the
containers. The services shall include developing
opportunities for, and negotiating leases providing for the
lease of containers worldwide, to shipping lines as well as
other customers or potential customers.
2) The leases of the containers entered into by the Leasing Agent
may include short or long-term, one way or round trip,
operating service, or master leases, financial leverage leases
or lease purchases. The leases shall be at such lease or
rental rates and upon such terms and provisions as determined
by and in the discretion of the Leasing Agent.
3) The Leasing Agent shall execute any and all agreements,
contracts, leases, certificates, instruments or other
documents necessary or desirable in connection with the lease
of the containers.
B. LEASE MANAGEMENT
1) The Leasing Agent shall perform all managerial and
administrative functions necessary for the continued operation
and leasing of the containers, including, but not limited to,
arranging for periodic inspection, maintenance and repair of
the containers and keeping records of the location and
operation of the containers.
2) The Leasing Agent shall xxxx all lessees for lease payments
due under the leases, and collect all amounts due pursuant to
the terms of the leases. The Leasing Agent shall transmit to
CAY, for deposit in such account or accounts designated by
CAY weekly, or at more frequent intervals as the Leasing
Agent is instructed by CAY. The Leasing Agent acknowledges
that all revenues collected by it from the lease of
containers for and on behalf of CAY are for the exclusive
benefit of CAY. The Leasing Agent shall follow such credit
policies with respect to the lease of containers, as it shall
establish from time to time.
3) In performing its managerial and administrative functions
pursuant to this Agreement, the Leasing Agent shall manage and
lease containers on behalf of the container owners without
preference to the ownership thereof. The primary factor that
the Leasing Agent will take into account in leasing containers
in times of low demand and excess supply will be the locations
and availability for lease of equipment relative to the demand
therefore.
E43
Exhibit 10.1
C. PURCHASE OF CONTAINERS TECHNICAL AID
1) When requested by and on behalf of CAY, the Leasing Agent
shall negotiate agreements with manufacturers for the purchase
of containers on behalf of the container owners, and develop,
discuss and agree with manufacturers on the technical design
specifications for the containers or container parts.
2) The Leasing Agent shall, upon request, inspect such newly
built containers for compliance with the technical
specifications agreed with the manufacturers, and determine
that the containers carry the standard Cronos markings.
3) CAY shall have the right to approve the terms and conditions
of all contracts to be entered into with manufacturers for and
on behalf of the container owners, but may delegate authority
to execute all such contracts to the Leasing Agent at its
discretion.
4) The Leasing Agent shall provide technical advice and support
concerning the containers, and, as requested, shall consult
with and advise third party lessees in the repair, maintenance
or purchase of containers. The Leasing Agent shall keep CAY
informed as to market developments and new issues concerning
technical design of containers, including any and all
environmental issues affecting or impacting the design of
containers or container parts.
D. EQUIPMENT SALES/REMARKETING
1) The Leasing Agent shall provide equipment sales and
remarketing support as requested by CAY. The Leasing Agent
shall use its best efforts to develop opportunities to sell or
remarket containers and to negotiate the terms of such sales
and remarketing agreements.
2) The Leasing Agent shall be responsible for ensuring that all
containers sold or leased satisfy all applicable import,
customs, tax and other requirements and restrictions, and that
all required permits and licenses have been obtained and all
fees have been paid. The Leasing Agent shall xxxx CAY, or the
container owners or the Pools in which it manages such
containers, for reimbursement of all such costs, expenses and
fees paid by the Leasing Agent.
4. PERSONNEL
The Leasing Agent shall be responsible for employing all personnel
necessary for it to render and fulfil the services and carry out the
duties required of it pursuant to this Agreement, including all required
commercial, administrative, technical, legal or accounting personnel;
provided, however, that nothing herein shall prohibit Cronos Containers
(Cayman) Limited from hiring its own personnel, or from contracting with
other third parties, for the provision of any or all such services.
5. UTILISATION
The Leasing Agent agrees to use the containers in accordance with the
standards accepted in the marine container leasing industry. CAY retains
the right, on behalf of itself and the container owners; to have the
containers inspected at any time, so long as such inspection does not
interfere with normal utilisation of the containers. The Leasing Agent
agrees not to xxxxx x xxxx, security interest, pledge or hypothecation of
any kind on or concerning the containers to any person.
6. INSURANCE
The Leasing Agent shall insure the containers for such amounts, on such
terms and against such liability or loss as it insures containers that are
owned by the Cronos Group. All insurance premiums for such insurance and
any deductibles payable under such policies shall be borne by the
container owners.
E44
Exhibit 10.1
7. BOOKS AND RECORDS
The Leasing Agent shall maintain such books and records as are customary
in the marine container leasing industry with respect to the containers
and the leasing thereof. The Leasing Agent shall provide CAY, upon
request, within three (3) business days of any such request, with copies
of all leasing contracts, agent agreements, depot agreements, and all
agreements or documents relevant thereto with respect to the containers.
CAY shall have access to the books and records maintained by the Leasing
Agent hereunder at any and all reasonable times, and shall have the right
to make extracts or copies thereof. In addition, the Leasing Agent shall
provide CAY with such information and at such times as requested by CAY to
enable it to prepare and file any reports required to be sent to the
container owners.
The Leasing Agent shall maintain such records as are necessary in order to
perform the calculation of Net Lease Revenue between CAY and the container
owners in accordance with the Management Agreements.
8. AUTHORITY OF THE LEASING AGENT
The Leasing Agent's activities taken on behalf of CAY will be taken as
agent for CAY, severally and individually, as well as other owners on
containers. The parties hereto expressly recognise and acknowledge that
this Agreement is not intended to create a partnership, joint venture, or
other entity among CAY, the Leasing Agent, or the container owners.
9. TERM AND EXPIRATION DATE
(a) This Agreement shall be for a term commencing on the Effective Date
and, unless terminated pursuant to Section 9(c) below, shall remain in
effect for a term of twelve (12) months. The term of this Agreement
shall be automatically renewed from year to year thereafter, unless
one party gives ninety (90) days' prior written notice to the other of
its election to terminate this Agreement.
(b) Upon any termination of this Agreement as aforesaid, the Leasing Agent
shall fully and completely cooperate with CAY in transferring
management of the containers to CAY or its designee. Such co-operation
shall include, without limitation, turning over all books and records
pertaining to the Leasing Agent's activities hereunder, promptly
notifying lessees of the change in the Leasing Agent of the
containers, and transferring the funds maintained on its behalf to
such accounts as are designated by CAY
(c) This Leasing Agent Agreement shall terminate with respect to any
container which is sold, otherwise disposed of, lost, rendered unfit
in the Leasing Agent's good faith judgement, declared a total loss or
destroyed, as of the date that such sale or other disposition is
consummated or such unfitness determined. In the event, this Agreement
terminates as to any container pursuant to this Section 9 by reason of
destruction, unfitness or loss, the Leasing Agent shall use its best
efforts to sell such container without further authorisation of CAY
10. COMPENSATION TO THE LEASING AGENT
As compensation for its services rendered hereunder, CAY agrees to pay to
the Leasing Agent the following:
(a) In consideration of the Leasing Agent's services in managing
and leasing the containers, CAY shall pay to the Leasing Agent
a management fee equal to 90% of the management fee that CAY
earns from managing containers on behalf of affiliated
companies and third party container owners. The management fee
shall be payable to the Leasing Agent monthly, based upon the
Gross Lease Revenues and Operating Expenses for the prior
month.
E45
Exhibit 10.1
(b) In addition to the management fees payable as permitted by
paragraph (a) above, CAY shall pay directly, or reimburse the
Leasing Agent for the payment of, the following costs and
expenses properly incurred by the Leasing Agent in the
management and leasing of the containers: (i) agent fees and
expenses; (ii) depot expenses of inspection, handling and
storage; (iii) maintenance and repair costs not paid for by
container lessees; (iv) bad debt expenses; (v) insurance
premiums and the deductible under any insurance policy
covering the containers and any costs of uninsured or excluded
risks; (vi) charges, assessments, or levies imposed on the
containers of whatever kind or nature; (vii) ad valorem, gross
receipts, and other property taxes which are levied against
the containers or the gross rentals therefrom; and (viii) the
cost of preparation and dissemination of material and
documentation relating to any sale of containers. The payment
of the foregoing expenses to the Leasing Agent shall be
conditional upon the review and approval by CAY.
(c) Upon the termination of this agreement as referred to in
Section 9(c) above, CAY will pay or cause to be paid to the
Leasing Agent, 90% of any fee earned by CAY in respect of such
termination.
(d) CAY hereby agrees to reimburse the Leasing Agent for all
out-of-pocket and/or extraordinary expenses, costs, charges
and disbursements made or incurred by the Leasing Agent in
connection with its duties and responsibilities hereunder. All
such out-of-pocket and extraordinary expenses, costs, charges
and disbursements made or incurred by the Leasing Agent shall
be reimbursed at the actual cost to the Leasing Agent plus a
10% processing fee.
(e) All compensation payable to the Leasing Agent hereunder shall
be paid in United States Dollars.
11. EVENTS OF DEFAULT
The occurrence of any one of the following events shall be an Event of
Default:
(a) The failure of either party to pay to the other party any net
amounts when due and payable pursuant to the terms of this
Agreement.
(b) The breach by either party of any material term of this
Agreement, which breach is not cured or waived within thirty
(30) days after written notice of such breach is given by the
non-breaching party to the breaching party.
(c) The Bankruptcy or voluntary dissolution of either party.
(d) The appointment of a receiver, custodian, or trustee to take
possession of all or substantially all of the property or
assets of either party or unless said petition or appointment
is set aside within thirty (30) days from the date of said
filing or appointment.
Upon the occurrence of an event of default hereunder, the non-breaching
party may, at its option, terminate this Agreement upon thirty (30) days
prior written notice to the breaching party, together with any other
rights or remedies that the non-breaching party may have under any
applicable law or in equity.
12. CAPITAL IMPROVEMENTS
(a) The Leasing Agent may make any capital improvements to a container,
if it is necessary in the Leasing Agent's opinion to make such
capital improvements.
E46
Exhibit 10.1
(b) The cost of any capital improvement made to any container is
acknowledged to be the responsibility of the container owner owing
such container. In connection therewith, any payments, including,
without limitation, insurance proceeds or indemnity payments from
lessees received to cover any of the foregoing shall be first used
to pay for any of the foregoing. The Leasing Agent shall have the
right to require CAY to pay the Leasing Agent upon fifteen (15)
days' prior notice and demand the cost as invoiced for any capital
improvement not otherwise paid for, as aforesaid, and the Leasing
Agent shall apply such payments to accomplish the same.
13. NON-EXCLUSIVE AGREEMENT
During the terms of this Agreement, and subject to the provisions of
Section 8 hereof, the Leasing Agent may provide container management,
sales or remarketing services directly or indirectly to any other company
or on behalf of any other entity.
14. CONFIDENTIAL INFORMATION
The Leasing Agent agrees to hold in strict confidence all documents and
information obtained with respect to CAY or the container owners and not
to divulge any proprietary information of or concerning either of the
same, to any other person, entity, corporation or association, and not to
convey or disclose any such information or documents, without the prior
consent of CAY
5. ASSIGNMENT
This Agreement, and the rights and duties hereunder, may not be assigned
by the Leasing Agent to any other person, entity, company, or association
without the prior written consent of CAY
16. ARBITRATION
Any controversy, claim or dispute arising out of or relating to this
Agreement or the breach thereof shall be settled by arbitration. The
arbitration shall be held in London, England, and shall be conducted in
English. All arbitrations shall be conducted according to the rules of
commercial arbitration of the International Arbitration Association or
similar organisation.
17. MISCELLANEOUS
(a) NOTICES. All notices, demands or requests given pursuant to this
Agreement shall be written, sent by first class mail, postage prepaid,
or by courier, telecopy or fax, to the following addresses:
TO LEASING AGENT: Cronos Containers Limited
Orchard Xxx
Xxxxxxxxx Xxxx
Xxxxxxxxx
Xxxxxxx
Xxxxxxxxx XX0 0XX
Xxxxxx Xxxxxxx
Telephone: (00) 0000 000000
Telefax: (00) 0000 000000
TO CAY: Cronos Containers (Cayman) Limited
Telephone:
Telefax:
E47
Exhibit 10.1
Notice shall be deemed effective upon personal delivery, upon
confirmation of receipt of the applicable telecopy followed by
confirmation telephone call, or three (3) business days after the date
on which the same is deposited in the mail or with any reputable
overnight courier.
(b) GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of England.
(c) SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement
shall incure to the benefit of and be binding upon the successors and
assigns of the parties hereto; provided, however, that assignment by
the Leasing Agent is restricted by the provisions of paragraph 15
above.
(d) SEVERABILITY. If any terms or provision of this Agreement or the
performance thereof shall to any extent be invalid or unenforceable,
such invalidity or unenforceability shall not affect or render invalid
or unenforceable any other provision of this Agreement, and this
Agreement shall be valid and enforced to the fullest extent permitted
by law.
(e) ENTIRE AGREEMENT; MODIFICATION. This Agreement represents the entire
agreement between the parties, and may not be amended, modified or
revised except upon a written document signed by each of the parties
hereto.
IN WITNESS WHEREOF, this Agreement has been duly authorised and executed by the
undersigned as of the _________ day of_____________________, __________.
CRONOS CONTAINERS LIMITED CRONOS CONTAINERS (CAYMAN) LIMITED
BY: /S/ XXXXX XXXXXXX BY: /S/ XXX XXXXXXXXX
ITS: Director ITS: Director
E48
